Used to be that TV advertising revenue changes -- growth, declines, and everything in between -- would have a specific relationship to gross domestic product.
Now that's no longer true. A new report from Barclays says: “While secular concerns on television advertising have emerged over the last few months, we note that the beta of major television advertising segments to GDP has been falling over the last decade.”
It adds: “This is happening even as the beta of digital advertising to GDP is actually going up. Consequently, the marginal growth dollar has been moving away from television for a while, a process that has not yet resulted in negative growth overall but cannot be ruled out over the coming years.”
TV marketers will continue to talk about how the return on investment in their TV media planning continues to work well. But with digital increasingly cutting into consumption, things keep changing. One needs to keep an eye on new relationships and the the broader measures -- just in case. Barclays says “a simple regression approach will need to be adjusted.”
Now based on what Barclays says is “our economist's nominal GDP growth estimate for the U.S. in 2015 of 4.4%, we arrive at network television advertising growth of low single digit decline to flat and cable growth of 2% in 2015 overall.”
Ugh. In years past, the growth rate of national broadcast/cable advertising would regularly be higher than the GDP growth rate.
Change can be uncomfortable. Mind you, the shift of ad dollars to digital over the past few years has no doubt already meant some trouble in your neck of the woods.
And if that doesn’t worry you, Barclays says the uncertainty around U.S. television advertising this year is the highest it’s been in some time -- all, somewhat weirdly, in this face of a strengthening U.S. economy.
In other words. put a new line item or two in your TV media plan for this year: volatility.