TV might still be king, but for how much longer? According to an eMarketer forecast, TV ad spending in the U.S. will continue to fall in 2018 and then again in 2019. Driving the trend is households cutting the cord and moving to over-the-top (OTT) video viewing.
Spending for TV ads peaked at $71.29 billion in 2016, then fell to $70.22 billion in 2017. Look for it to measure $69.87 billion this year and then $69.17 billion in 2019.
Not only is TV ad spending down, but so is TV’s total share of all U.S. ad expenditures. TV ads took 33.9 percent of the pie in 2017, but will count only 31.6 percent this year.
The chart below shows eMarketer’s TV ad spending forecast for the next few years. Why does TV get a bump in 2020? Because that’s both a presidential election year and a Summer Olympics year. That bump is only a blip, however, as ad sales will keep dropping after. Look for TV to make up less than a quarter of all U.S. ad expenditures by 2022.
“The shift of audiences to OTT viewing is changing the climate of the TV ad market,” says eMarketer senior forecasting director Monica Peart. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic games.”
The number of traditional TV viewers in the U.S. will drop 0.2 percent this year, as cord-cutting continues. At the same time, the number of OTT viewers will rise by 2.7 percent.
For a sunnier outlook, check out eMarketer’s digital ad spending forecast. U.S. digital expenditures will rise by 18.7 percent this year, growing to $107.30 billion. Ad-supported platforms Roku and Hulu should do especially well. Roku’s revenues will go over $293 million this year, an astounding 93 percent rise from 2017. Hulu, meanwhile, will take in $1.12 billion, a 13 percent increase.