TV Industry Suffers Steepest Drop in Ad Sales Since Recession
TV Industry Suffers Steepest Drop in Ad Sales Since Recession
Lucas Shaw December 9, 2019
Declines in TV viewership have suppressed the medium’s
advertising dollars, according to research firm Magna Global, which released
the data as part of report on the global ad business. Viewership fell sharply
in Europe, compounding the trend in the U.S., China and Australia.
Traditional television has hemorrhaged viewers in recent years,
as people trade cable and satellite packages for online services Netflix and
YouTube. Cord cutting has been especially pronounced in the U.S., the world’s
largest media market, and should continue to accelerate as media giants Walt
Disney Co. and AT&T Inc. introduce their own streaming services.
Even with the retreat from TV, overall ad revenue climbed for
the 10th year in a row. The industry was buoyed by digital sales, which rose
15%.
The TV business had previously eked out gains in advertising
sales by charging higher prices. And it’s still seen as a useful medium when
marketers need to reach a large, live audience. Technology companies excel at
allowing advertisers to target individuals who have searched for a sweater on
Google, liked a movie’s page on Facebook or looked for detergent on Amazon.
Yet declines in viewership now outpace the rise in TV ad
pricing. So-called linear TV viewership has been declining by 10% in the U.S.,
Australia and China for a few years, according to Vincent Letang, the author of
the report. European TV channels suffered drops of 7% to 8% among viewers age
18 to 49, worse than the 5% decline last year.
Worldwide Decline
“Almost everywhere now, we have linear viewing declining double
digits, or high single digits,” Letang said in an interview. He blamed the
proliferation of streaming services, which took hold in Europe a few years
later than in the U.S., as well as the slowing economies in the region.
U.S. TV ad sales will return to growth in 2020 thanks to the
Summer Olympics and the presidential election, but that is a temporary boost.
The TV industry isn’t the only one suffering. Technology
companies Google and Facebook Inc. have siphoned advertising dollars away from
print publications and radio in recent years. Online companies garnered more
than half of global advertising sales in 2019 for the first time, accounting
for $306 billion of the $595 billion spent globally.
Radio advertising sales stabilized in 2019, while the
out-of-home category -- namely, billboards -- was the only traditional media to
actually grow. That’s due in part to technology companies, which use billboards
to tout their services. Facebook, Apple, Amazon, Netflix and Google all rank
among the 20 largest out-of-home advertisers.
©2019 Bloomberg L.P.
Comments
Post a Comment