Media buyer Zenith expects advertising spending on TV in the U.S. to fall 0.4% to $68.2 billion in 2018.
According to Zenith, the $68.5 billion spent on TV advertising in 2017 was a peak, with spending dropping to $66.5 billion in 2020.
“Television is shrinking in the US, particularly for network television and syndication, as advertisers shift budgets online,” said Jonathan Barnard, Zenith’s Head of Forecasting and Director of Global Intelligence.
“Some of the money coming from television is going to online video platforms, which offer targeting and personalization as well as high reach among young viewers. For most video content producers, future growth will come from monetizing their content online.”
Zenith forecasts spending on broadcast network advertising dropping to $16.686 billion in 2018 from $16.770 in 2017. Cable is seen declining to $23.298 billion from $23.43 billion. Spot will be stable at $25.496 and syndication will slip to $2.734 billion from $2.775 billion.
Related: GroupM Sees Spending on TV Rising 4% in 2018
The forecast was released in time with the 45th Annual UBS Global Media and Communications Conference in New York. It is markedly different from an ad forecast released by GroupM, also for the UBS conference.
The start of the 2017-18 broadcast season does provide much reason for optimism, Zenith notes, with C3 ratings among adults 18 to 49 down 15%, and live viewing of primetime programing falling to 50% from 53% a year ago.
The local TV price forecast is flat, according to Zenith This is a result of 2017 being a non-political year, after politics having had considerable impact in 2016 in many local markets.
Zenith says it is pushing local TV automation buying, pushing the cross-platform and cross-functional solutions to be a viable inventory source. “We are currently testing an automated model, which will yield targeted and efficient inventory not attainable until now. We are driving this innovation to ensure our clients have access to these inventory channels at the ground floor,” Zenith said.
Overall in the U.S., Zenith says there remains some persistent uncertainty in the marketplace given the recent elections.
Advertising is forecast to increase 3.5% in 2017, 3.3% in 2018, 2.9% in 2019 and 3.4% in 2020.
Digital, particularly mobile, continues to take dollars away from print media as consumers use mobile apps and other outlets to consume content digitally, Zenith says.
Digital consumption has also driven overall video consumption up, even while linear television viewing continues to decline, says Zenith. Cross-platform measurement is therefore a critical frontier, as Nielsen follows comScore to market with syndicated products offering audience measurement across TV, desktop and mobile.
In the US, internet ad spend will capture 35.1% of the market in 2017, nearly at the global average. Zenith forecasts 14.6% growth in internet advertising in the US in 2018, compared to 3.5% growth for the market as a whole. By 2020, internet will account for 44.6% of total ad spend in the US, slightly above the global average of 44%.The U.S. is therefore a leading digital market for growth in internet advertising.
Globally, Zenith forecasts ad spending to grow 4.1% in 2018 to $578 billion, up front $555 billion in 2017.
Zenith expects internet advertising’s share of ad spend to continue to rise, reaching 40% in 2018 and 44% in 2020. Its value will rise from $203 billion in 2017 to $225 billion in 2020.
The share of advertising expenditure allocated to internet advertising varies widely across the world, Zenith says. In the most advanced markets (Sweden and the UK) it will account for more than 60% of total expenditure next year, and it will account for between 50% and 60% in another six (Australia, Canada, China, Denmark, Norway and Taiwan).
“We are seeing a battle played out in business, marketing and media between big players and small players,” said Vittorio Bonori, Zenith’s Global Brand President. “Growth is coming from big countries and big cities, and being captured by big platforms. Brands should focus on upstream strategy, data-informed UX planning and downstream automation”.
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