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Zenith Says TV Share Of Ad Spending Peaked - Broadcasting & Cable

Zenith Says TV Share Of Ad Spending Peaked

Agency sees U.S. broadcast spending down; cable and online video rising
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Media agency ZenithOptimedia sees ad spending growing modestly over the next few years, but in the U.S., television will lose share to digital media.

Zenith’s forecast calls for gains of 3.8% in 2015, 4.2% in 2016 and 3.7% in 2017 in U.S. ad spending.

But spending on broadcast TV is expected to drop 5% in 2015 to $16.5 billion, 1% in 2016 and 3% in 2017. For cable, spending is expected to rise 3% in 2015 to $23.1 billion, 4% in 2016, and 4% in 2017.

“While we are well past the worst of the economic downturn, economic growth remains sluggish,” the Zenith forecast said.

“Traditional media are struggling to reach new consumers and as a result are losing revenue. Print, specifically, is suffering as more consumers obtain their news online or by mobile app. With tablet and smartphone penetration growing, the portability of digital news will hurt the print industry even more," Zenith said. “Some newspapers are selling print ads as part of digital packages in an effort to keep the format’s numbers up.”

Zenith added that “as for television advertising, network ad spend still draws a large percentage of dollars, but cable and online video will continue to steal share.”

Zenith predicts global ad expenditures will grow 4.9% in 2015, reaching $545 billion by the end of the year. The forecast for 2015 is down from its previous prediction in September.

“Despite the rapid growth of the Rising Markets, the U.S. is still the biggest contributor of new ad dollars to the global market,” the agency said.

“Mobile technology is creating new opportunities for brands to build relationships with consumers, while programmatic buying is making brand communication cheaper and more effective. Social media provides a strong example of how to advertise effectively on mobile platforms, and we expect mobile marketing to develop further as other media learn from this example,” said Steve King, ZenithOptimedia’s CEO, Worldwide.

Television’s share of global ad spending is also expected to drop over the next few years as desktop and mobile internet grow much faster, Zenith said. Television’s market share has grown steadily over the last three and a half decades, from 29.9% of spend in 1980 to 39.6% in 2014.

Zenith says TV’s share has peaked and its latest forecast sees its share falling to 37.4% in 2017.

Marketers are also beginning to move small budgets away from television to online video, which Zenith expects to grow from 1.9% of global spending in 2014 to 2.8% in 2017. 

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