With a strengthening economy, media buyer Magna is increasing its forecasts for advertising spending on TV.
Magna expects national TV ad revenue to increase 0.2% to $43.5 billion in 2018, including cyclical events such as the Olympics, World Cup and mid-term elections. Magna had previous forecast spending to decline by 0.2%.
For 2019, Magna sees spending dropping 3.5%, but that’s a smaller drop than the 3.9% decline Magna forecast at the end of last year.
Excluding those cyclical events, Magna sees TV ad revenue falling 1.4% in 2018 and 2% in 2019.
Magna noted that in the first quarter, excluding the Olympics, TV spending was up 0.5%, marking the first improvement after six consecutive quarters of declines.
“The resilience of television is also supported by the sustained demand from big consumer brands,” Magna said in its report.
“Because some marketers are concerned about brand safety and ROI accountability in digital environments, many brands have paused the long-term diversification of their media mix towards digital formats and have instead remained loyal to traditional linear television in the last 18 months,” Magna said.
Local TV spending, including the cyclical events is expected to grow at a 9.9% clip to $21.7 billion. That forecast is an upgrade from the 9.6% gain forecast earlier. For 2019, local TV is projected to drop 14.7% in a post-election year.
Magna notes that TV is evolving, with advanced television advertising techniques gaining momentum in the U.S. and the U.K.
“Most ‘advanced’ TV campaigns these days are based on cable or satellite subscription and managed through set-top boxes, but the ubiquity of ‘smart’ connectable TVs and over-the-top (OTT) devices creates the opportunity to target all TV viewers, including ‘cord cutters’ on the big screen around ‘safe’ television content, through on-demand or linear consumption,” the report says..
Overall Magna sees U.S. ad spending growing 6.4% to $206.6 billion in 2018 including cyclical events, with TV representing a 21.4% share. It had earlier forecast 5.5% growth.
For 2019, total U.S. ad spending is expected to rise 2%.
Despite some controversies, digital advertising will grow at a 15% clip in 2018, topping $100 billion, led by a 28.5% gain in mobile. Magna actually reduced its outlook for mobile by a percentage point. Social is expected to jump by 31.4%. Digital will represent 52% of all U.S. ad spending.
Magna also reduced its forecasts for digital growth in 2019 predicting that digital will rise 11.3%, with mobile growing 20.4% and social up 20.9%.
Globally Magna sees advertising growing by a record 6.4% in 2018, thanks to strong economies in the U.S,, China, Russia and India and recovering economies in Latin America and the Middle East.
Global digital advertising sales will be up 15.6% to $250 billion, representing 45% of global ad expenditures.