2019 Forecast: TV Ads Decline Four Percent, Digital Growth Soars 18 Percent

September 27, 2018

By Wayne Friedman

After some promising advertising results this year, expect TV advertising to sink back into a decline in 2019 — as digital advertising continues to soar.

MoffettNathanson Research says total TV advertising will drop 4.3% in 2019 — all due to lower comparisons against the Winter Olympics and U.S. midterm elections this year.

Overall, U.S. advertising will grow 5% in 2019 versus a 8.2% hike this year. Much of this continued growth is coming from digital advertising. Next year's estimates forecast that digital advertising will sustain its strong gains — up 18.3%, somewhat on par with a 21.9% boost for 2018.

Looking at specific TV businesses:

Local TV stations will sink 7.2% in 2019 (versus a 9.1% climb estimate for all of 2018), while the big four broadcast networks will be down 3.5% (up 6.0% for 2018); national cable networks will be off 3% (from a 2% improvement this year) and local cable will be down 4.1% (with a 3.8% gain this year), while national TV syndication will slip 1% (versus the same decline this year).

For all of TV, MoffettNathanson expects a 4.7% gain for 2018, given the Winter Olympics and U.S. midterm elections ad activity — a positive reverse from a 6% rollback last year.

Other traditional media projections for 2019: Newspapers, down 7.1% for 2019; radio, slipping 1%; consumer magazines, sinking 7%; and outdoor — the lone improvement — adding 2%.

Without digital advertising — looking at just traditional media — there will be a 4% drop in 2019 versus a slight 0.6% decrease this year.

"Looking at the composition of long-term U.S. ad growth, it becomes evident that the rise of internet and digital has come at the expense of traditional media," writes Michael Nathanson, media analyst at MoffettNathanson Research.

It expects digital "to further take share away from traditional TV over the next few years, rising to 54% [share] by 2020," with 31% going to traditional TV; 10% other traditional media; and 4% print advertising.

Still, it notes some "cracking" around digital — at Facebook, primarily, noting that its ad growth decelerated to 38% in the second quarter from 44% in the first quarter. Conversely, Google's U.S. ad revenue growth accelerated to 19% in the second quarter from a 16% improvement in the first.

Source

"2019 Forecast: TV Ads Decline Four Percent, Digital Growth Soars 18 Percent." MediaPost, 9/27/18.

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