The U.S. endured a .35 percent year-over-year contraction across broadcast, digital broadcast and radio platforms in Q2, according to a new report.
This figure comes despite the emergence of political advertising spend in primary Democrat and Republican elections, which has seen a 264 percent growth rate. When excluding political ad spend from the findings, broadcast, digital broadcast and radio saw an overall 4.90 percent contraction compared to this time last year.
The findings, from Matrix Solutions’ 2018 Midyear Ad Spend Report, are the latest comprehensive update on the state of the advertising spend ecosystem. It derived from the activity of more than 10,000 active users within media ad sales teams from January 2018 to June 2018.
“According to our data, overall ad spend throughout the year, to date, has remained relatively flat when including the buoyancy that always comes from political campaigns, and without there’s a clear contraction,” said Mark Gorman, CEO at Matrix Solutions.
It’s finally happening: Next year, people around the world will spend more time online than they do watching TV, according to new data from measurement company Zenith.
In 2019, people are expected to spend an average of 170.6 minutes each day on online activities like watching videos on YouTube, sharing photos on Facebook and shopping on Amazon. They’ll spend slightly less time — 170.3 minutes —watching TV.
The global transition from TV to internet as the main entertainment medium was a long time coming, but it also happened faster than expected. Last year, Zenith predicted that TV would still be more popular in 2019 but has since revised its estimates.
TV ad spending will be lower than anticipated this year, according to eMarketer, because people are cord-cutting at a faster clip than previously expected.
According to the market-research company, TV ad spending in 2017 will expand just 0.5% to $71.65 billion, down from the $72.72 billion predicted in its first-quarter forecast for 2017. Further, it said, TV’s share of total media ad spending in the US will drop to 34.9% and is expected to fall below 30% by 2021.
“eMarketer expected a slowdown this year in TV ad sales, after 2016 benefited from both the Olympics and US presidential election,” said Monica Peart, eMarketer’s senior forecasting director. “However, traditional TV advertising is slowing even more than expected, as viewers switch their time and attention to the growing list of live streaming and over-the-top [OTT] platforms.”
Cord-cutters, or consumers who are opting for getting their TV via the internet rather than traditional pay TV services, are a major factor behind tempered TV ad spending. As the phenomenon gains momentum, traditional pay TV operators like Dish Network are developing their own streaming platforms such as Sling TV, networks such as HBO and ESPN are launching or planning their own standalone digital subscription services, and digital players like Hulu and YouTube are delivering live TV channels over the web at lower prices.
In fact, cord-cutting has become so prevalent that even telecommunication companies like AT&T and T-Mobile have jumped in on the action in recent weeks, offering customers bundle deals with access to streaming services like Netflix and HBO.
eMarketer has also increased its estimates for the growth in cord-cutters substantially for 2017 through 2021, saying that by 2021 the number of cord-cutters will nearly equal the number of people who have never had traditional pay TV, or “cord-nevers.”
The company forecasts that there will be 22.2 million cord-cutters over the age of 18 this year, more than the 15.4 million the company had previously predicted. This figure is up 33.2% over 2016. The number of US adult cord-nevers is expected to grow 5.8% this year to 34.4 million.
“Younger audiences continue to switch to either exclusively watching OTT video or watching them in combination with free TV options,” said Chris Bendtsen, the senior forecasting analyst at eMarketer. “Last year, even the Olympics and presidential elections could not prevent younger audiences from abandoning pay TV.”
While eMarketer predicts that 196.3 million US adults will still watch traditional pay TV, including cable, satellite, or telco, this year, that number would be down 2.4% from 2016. By 2021, the company thinks, that total will have fallen nearly 10% compared with 2016.
US adults who watch TV are spending less time in front of the screen as well. The average time spent watching TV among US adults this year will drop 3.1% to three hours, 58 minutes a day this year, according to eMarketer, the first time it has dropped below four hours.
In contrast, digital video consumption continues to rise. US adults will consume one hour, 17 minutes of digital video this year, the company said, up 9.3% over 2016.
Fox Television’s broadcast of Super Bowl LI on Sunday night drew a 48.8 overnight rating, according to Nielsen data released by the network, lower than the previous two Super Bowls.
The contest included a thrilling finish, with the New England Patriots topping the Atlanta Falcons in the National Football league’s first-ever Super Bowl overtime. The Patriots came back from a 25-point deficit and quarterback Tom Brady, 39, won his record fifth championship.
The brief overtime, in which the Patriots scored a touchdown in their first possession, allowed Fox to add four more commercials, and the network brought in an estimated $509.6 million in ad revenue for the broadcast, according to research firm iSpot.TV.
Last year’s Super Bowl drew a 49.0 overnight rating, while the Patriots’ previous title game appearance in 2015 helped Comcast Corp’s NBC television draw a 49.7 rating, the highest overnight rating on record.
The overnight rating measures 56 major markets in the United States, representing about 70 percent of the country and is an early indication of what the final number will be.
Fox, a unit of 21st Century Fox, will have final numbers, including viewership, later on Monday.
The shift in ad industry market share from so-called “analogue” media to “digital” media is accelerating, and the latter is now expected to surpass television’s historically dominant share of U.S. ad spending by the end of 2016 — months sooner than expected, according to the statsmasters at eMarketer.
Putting aside that television is a digital medium too, eMarketer’s estimates categorize it separately from things like online and mobile digital media and based on its calculations, the sum of those categories will reach $72.09 billion by year end — a smidgen higher than the U.S. TV ad marketplace’s projected $71.29 billion.
“That means digital will represent 36.8% of total U.S. media spending, while TV will represent 36.4%,” according to an eMarketer spokesperson, noting that the firm’s original projections — made in March — called for TV vs. digital’s market share tipping point not to happen until sometime next year.
What makes digital’s ascendance so remarkable is that it occurred during a so-called “quadrennial” year in which TV ad spending benefitted from incremental spending from both a Summer Olympics and a presidential political season.
The eMarketer report notes that TV is, in fact, continuing to expand — it’s just not growing as fast as digital ad spending.
“The strong performance of the digital ad market is being driven by several factors, including, not surprisingly, mobile and video,” eMarketer notes, adding: “Mobile ad spending will grow 45.0% this year to reach $45.95 billion. As it grows, it will represent an increasing share of overall ad spending. By 2019, mobile will represent more than a third of total media ad spending in the US. Google is the undisputed king of mobile and will remain so for the foreseeable future. Google will capture 32.0% of the mobile ad market — its closest rival Facebook capturing 22.1% this year.”
Ad spending on original digital — both desktop and mobile — programming has more than doubled since 2014, and those budgets have come primarily out of television, according to findings of a survey of advertiser and agency executives released this morning by the Interactive Advertising Bureau (IAB).
Results of the survey, which suggest a significant shift is taking place in the TV/video advertising marketplace, not surprisingly were released this morning by the IAB on the first day of its week-long Digital Content NewFronts in New York City.
The survey, which was conducted by Advertiser Perceptions, polled 360 ad executives between March 14 and 25, and found that their average video ad spending has nearly doubled over the past three years, but their investments in the kind of “original” digital video programming being showcased at the NewFronts rose 114% in two years.