TV Revenue Expected to Dip in Record-Setting Year for Ads - Broadcasting & Cable

TV Revenue Expected to Dip in Record-Setting Year for Ads

Magna forecasts digital will surpass half of total spending
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Media agency Magna sees 2018 as a year in which U.S. ad revenues will reach an all-time high, surpassing $200 billion, despite a drop in television spending.

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In its latest forecast, Magna sees national TV ad spending falling 2% to $41.9 billion from $42.3 billion in 2017 and a peak of $43.3 billion in 2016.

TV ad revenue will continue to slide, according to Magna, declining another 2.3% to $41.3 billion in 2019 and falling to $36.6 billion by 2023.

Long-term forecast for U.S. national TV ad revenues. Source: Magna.

Long-term forecast for U.S. national TV ad revenues. Source: Magna.

“A significant level of CPM [price] inflation for national Television . . . won’t be enough to offset the double-digit ratings declines on a typical year,” Magna said in the report.

Related: Magna Sees Improvement in TV Ad Expenditures

The agency pegs price increases for adults 18 to 49 in prime time on English speaking broadcast at 11% for calendar year 2019.

English-language broadcast TV revenue is expected to be down 2% in 2018 and 2.3% in 2019. A drop of .04% if forecast for cable in 2018 followed by a 0.6% drop in 2019 and Spanish language TV is seen falling 4% in 2018 and dropping another 6.7% in 2019. Syndication is seen rising 1.8% in 2018, but dropping 3.1% in 2019.

Magna sees ad revenue for local TV in the U.S., excluding political spending during the mid-term elections, dropping 4.4% in 2018 and 4.5% in 2019.

Broadcast stations will be down 6.1% in 2018 and 6.5% in 2019. Local cable is expected to rise 0.9% in 2018 and 1.1% in 2019.

Magna said weakness of automakers was a big problem for local TV.

The agency forecasts political spending for the mid-terms at $2.9 billion, up 19% from four years ago. Including that spending, local TV revenue will be up 9.1%.

In the overall ad market, Magna sees U.S. advertising rising 6.9% in 2018.

Digital ad revenue will pass $100 billion and account for 51.5% of total U.S. advertising, topping the one-half mark for the first time.

Mobile digital advertising is expected to grow by 30% this year to about $70 billion--more than TV and twice as much as desktop based revenues.

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