TV ad spending will decline again in 2018, eMarketer says

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After a slight decline in 2017, television ad spending in the United States is due to fall again in 2018, according to new research from eMarketer.

The firm’s new U.S. advertising forecast predicts TV ad spending will fall 0.5% to $69.87 billion in 2018. That decline will drop TV’s share of the total U.S. media ad spend market from 33.9% to 31.6%.

The good news is that that after the 2018 decline and another 1% drop forecast for 2019, eMarketer sees spending going up by 0.5% in 2020, due to the Presidential election and Summer Olympics in Tokyo.

“The shift of audiences to OTT viewing is changing the climate of the TV ad market,” said eMarketer senior forecasting director Monica Peart in a statement. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic Games.”

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But after that boost in 2020 TV ad spending will be back on the decline and will total less than one quarter of all ad spending in the U.S. by 2022.

As TV ad spending declines, digital ad spending in the U.S. is on the rise and OTT platforms like Hulu and Roku are in line to reap the benefits. According to eMarketer, total digital ad spending in the U.S. will rise 18.7% to $107.3 billion in 2018 and OTT will continue to emerge as a bigger part of that picture. Roku’s ad revenues will be up 93% to $293 million this year and Hulu’s will be up 13% to $1.12 billion.

“Over-the-top platforms are growing in number and size, and many compete directly with pay TV by offering bundles of live channels at attractive price points,” said eMarketer principal analyst Paul Verna in a statement. “Consumers who want to cut or shave the cord now have a wealth of options that didn’t exist a couple of years ago. And we expect the offerings to become even more robust as more players enter the market.”