A reason for the importance of local-direct business! Philip Jay LeNoble, Ph.D.
TV Could Lose $5 Billion In Advertising Through 2023: Analyst
- by Wayne Friedman , September 29, 2020
Television advertising could lose further share in the wake of rising digital advertising in the next few years -- due to continued growth of small and medium-sized businesses using digital platforms.
Digital advertising will rise by $94 billion through 2023, with TV slipping $5 billion and other media -- print, radio, outdoor -- collectively losing $14 billion, according to MoffettNathanson Research.
“Digital’s gains are primarily coming from attracting new money into the market rather than eating away from TV ad budgets in absolute terms,” says the report -- primarily from small and mid-size businesses.
Total U.S. advertising will rise 33% to $302 billion in 2023 versus $227 billion in 2019, the report says.
TV has been especially hard hit by the recent loss of TV advertising of national traditional retail brands during the COVID-19 crisis. “We believe traditional retail is just one example of traditional businesses likely to cut back on TV ad spend due to top-line pressures from Covid-19,” says the report.
But going forward, TV may benefit from rising big brand technology advertisers -- Amazon, Alphabet, Netflix, Apple, Microsoft, eBay and Facebook. It is estimated that on average, these technology companies spent 20% of their media budgets on television in 2019.
“On the structural health of TV’s core advertiser segments, we believe that weakness among retail may in fact be offset by strength in technology,” MoffettNathanson Research says.
In addition, it says that while accelerating cord-cutting trends are hurting TV, “we expect this will be partially offset by an increase in AVOD [advertising video on demand] spending.”
In 2019, U.S. digital advertising totaled $104 billion, with TV at $77 billion, print at $20 billion and other media at $25 billion.
By 2024, digital advertising will increase its growing dominant share of the U.S. advertising market -- up to 69% in 2024 (from 46% in 2019), MoffettNathanson says.
TV will sink to 22% in four years, from 34% in 2019, while print media will be at a 3% share (down from 9%), with other media going lower to a 5% share (from 11% in 2019).
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