GroupM Sees TV Ad Spending Falling Long Term

2020 political revenue more than $10B
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Total television advertising in the United States will decline by 1% to $62.23 billion in 2020, according to a new forecast from media buying agency GroupM to calls for declines in spending on TV through 2024.

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GroupM said that in 2019, TV ad spending will be $64.31 billion, down 2% from the previous year.

National TV advertising will be flat or up slightly, while local is down by low-single digits, GroupM said.

“We expect this declining trend to persist, even with new forms of premium TV advertising regularly emerging," GroupM said. “Certainly the ad-supported SVOD services will be attractive environments and their enhanced targeting capabilities will also appeal to advertisers. They will partially offset the ongoing erosion of traditional TV’s reach and frequency, but the core set of advertisers that have historically driven TV spending are likely to reduce the budgets they allocate to the medium.”

Longer term, GroupM sees TV spending continuing to slide. In 2024, total TV spending will be $60.32 billion. That would drop TV’s share of U.S. ad spending to 21.2% in 2024 from 26.4% in 2019.

GroupM forecasts that political advertising in the U.S. could top $10 billion in 2020.

Overall, U.S. advertising will grow 6.2% to $244 billion in 2019, the fourth straight year of mid-single digit growth, excluding the effects of political campaigns, GroupM expects.

For 2020, the agency predicts 4% growth, despite some softening of the economy after the boost from the 2017 tax law changes. The Olympics are likely to provide some benefits, although it is difficult to measure whether or not Olympic spending is incremental.

Beyond 2021, GroupM sees ad growth slowing to about 3% annually.

Internet advertising, including search, will grow 12.8% to $126.5 in 2020, following a 19.9% increase in 2019. By 2024, internet advertising will reach $170.8 billion, or 60% of all ad spending.

Big digital companies — Amazon, Alphabet, Facebook, Amazon, Netflix, Uber, eBay, Booking.com — spend upwards of $30 billion on advertising globally in 2019, with most of it going to the U.S. market. An additional hundreds of millions of dollars is being spent by new digital companies like Wayfair and Chewy.com, often referred to as direct-to-consumer marketers.

“Such rapid growth from these marketers as we have seen in recent years should abate, and eventually they should normalize their growth rates. This would contribute to industry-wide ad spend deceleration. However, the U.S. is more likely to produce more of these kinds of marketers in years ahead than are most other economies, and so there is some reason for a degree of optimism around these figures,” GroupM said.

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