Dive Brief:
- According to MAGNA Global, TV advertising spending is expected to drop next year -- a first in a non-recession economy.
- An additional outlook by ZenithOptimedia's Advertising Expenditures Forecast shows TV’s share of global ad spending dropping from this year’s 38% to 34.8% in 2018.
- The separate forecasts all see global ad spending going up 5% next year with digital media making double-digit growth rate gains.
Dive Insight:
Digital ad spending has been on the rise at the expense of TV and more traditional marketing channels. What's more, forecasts from different groups all find TV ad spending down over the next several years, a situation that has never occurred in a non-recession economy. Even non-recurring events like the heating up presidential election and next year’s Summer Olympics in Brazil aren’t expected to make up the loss in TV ad spending.
A forecast from Interpublic’s MAGNA Global sees digital passing TV as the top media ad category in 2017. The report described the issues facing TV advertising, saying, “We believe that TV vendors, in the long term, won’t be able to obtain the CPM inflation rates they would need to offset double-digit declines in ratings.”
MAGNA Global’s director of global forecasting Vincent Letang told the Wall Street Journal that users, and young users in particular, are moving away from TV faster than expected. The TV viewing habits of the 18-to-49 demographic are on the wane in North American and European markets, as well as many emerging markets.
Meanwhile, as younger TV viewers move toward streaming video, marketers are also shifting their ad budgets in that direction, and per Magna Global, ad spend growth in 2015 was fueled by a 17% rise in digital media ad sales.
And though ZenithOptimedia predicts digital media to overtake TV in ad spend in the next two years, it also sees Internet ad spending to jump ahead of digital media by 2018. Digging deeper, ZenithOptimedia also projects mobile advertising to reach $114 billion by 2018, ahead of desktop ad spending.
