Price inflation for TV ad revenue will balance out a loss in audience globally, according to a new ad forecast from Zenith, as consumer uptake of streaming video continues to fragment the audience and challenge brands looking to reach younger consumers.
The report, released today, sees global ad revenues flat for television, despite boosts expected from the coming 2020 Summer Olympics and the US presidential election. Prices for TV advertising are seen rising 6.1% in 2020 as the audience is expected to decline 1.6%. Since 2010, ad prices have risen by an average of 6.5% with TV audiences declining an average 1.3% annually.
The majority of any bump in revenues expected will come in the US and China, which combined are expected to see 56% of the world’s ad spend through 2022.
TV ad revenue groowing in India
But, while both China and the US see declining growth rates, India is experiencing increasing ad spend to the tune of 12.4% in 2020, 12.9% in 2021 and 12.6% in 2022. By the mid-2020s India will overtake China as the main source of growth in Asia Pacific, and the second-biggest in the world.
In the US, meanwhile, ad revenues are forecast to slip to $65.9 billion in 2020 and decline to $63.6 by 2022. Network TV revenues from ads are expected to decline 3%, national cable 2% and both spot and syndication 1%.
But, Zenith has high hopes for online video and social media, citing them as the two fastest-growing categories, up 17% and 14% respectively. The biggest driver? Video consumption on smartphones.
The bottom line
While demand for advertising has grown consistently (advertising expenditures have increased 5.1% annually over the past decade), audience fragmentation due to consumers switching to non-commercial video entertainment — like Netflix — has severely depleted the audience, something that’s happening at an increasing pace.
Obviously, it’s not just happening in TV, as print has been clobbered by an audience that’s moved to the Internet.
And, you can expect the same thing in video. Viewers are replacing commercial TV with services that provide a better viewing experience; from the ability to binge to being able to watch content uninterrupted by ads to being able to travel with your content.
As more content goes over-the-top to smartphones, meanwhile, adblocking also is limiting consumers exposure to digital advertising.
As Matt James, Global Brand President at Zenith said: “The days when we could find audiences all in one place are long gone.”
But, just as technology has made audiences more a moving target than ever before, Technology also will help brands find them. Eventually.
But, will it be too late?