Could Advanced TV Advertising Be A $100B Business?

Think the linear TV advertising market could rise 50% -- in a few years? How about 100%? 

Given the state of digital media, all this seems to be a counter-initiative.

But one media analyst says advanced TV advertising could be a $100 billion business. This would be higher than the current $50 billion to $70 billion total TV market. For many estimates, that includes national broadcast and cable networks, local TV (broadcast and cable), syndication, and other platforms.

Credit Suisse media analyst Omar Sheikh points to four reasons: More targeted advertising opportunities for TV network sellers and buyers; TV networks groups doing a better job selling all their vertically integrated networks; new efforts with third-party measurers; and Open AP, the new TV network consortium looking to standardize new audience segments.

Sheikh said to "We think TV ad growth can accelerate from the 2% per annum we have seen over the last three years to 5% to 7% between now and 2030.” He doesn’t believe the prevailing wisdom: The growth of digital media will come at the expense of traditional TV.



We don’t know all the specifics. Is this single-digit percentage growth in addition to new advanced TV advertising gains? Perhaps there is some overlap in digital media, since the TV networks do represent a healthy part of digital media’s growth, given the fast-moving premium video segment.

No matter. Any of the sharply higher gains from new advertising efforts would be music to the ears of big TV media networks.

Here’s the big eye-opener: Sheikh sees annual growth rate at 12% to 48% for advanced advertising -- all this from listening to expectations of highly motivated ad tech/third-party companies, such as Simulmedia, Clypd and Matter More Media.

For a long time, we have heard euphoric descriptions about the new TV advertising world -- call it advanced, addressable, targeted, or otherwise. If fully realized, all this could easily place higher value on traditional TV programming content.

Highlighting a $100 billion number puts a shining picture out there -- especially in light of the current uncertainty of the market.

Facing all this, legacy advertising systems are still slow-moving.

Remember in the mid-to-late '90s when many advertising/TV trade magazines were writing about the end of the upfront TV advertising markets?  

In the past few weeks, virtually all TV networks have said revenues are up for the current upfront ad selling period -- rejecting media estimates

So 20+ years later, where are we now?

1 comment about "Could Advanced TV Advertising Be A $100B Business?".
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  1. Ed Papazian from Media Dynamics Inc, July 14, 2017 at 10:07 a.m.

    This is a fine theory but the basic truth about "linear TV" across all dayparts and network/station types is that people who are less desirable from a maketing standpoint for most advertisers ( low brows and oldsters ) do much more TV viewing than those who are usually deemed the most desirable---people in the affluent or near affluent category who are under the age of 50 or 55.So, if one were to index all TV shows based on their viewers being frequent buyers of most products or services, about 10-20% of all TV shows might index meaningfully abve average, while 40-50% would probably come in below par. This is not to say that the latter viewers have no value,just less value.

     If better targeting focused only on those shows that indexed above average for most advertisers it would soon become apparent that there simply aren't enough "good" TV shows around to fuel an industry-wide ipsurge in CPMs attributed to sellers charging more for their most "valuable" audiences. Some advertisers might benefit as well as some sellers---but not all or even most of them. Meanwhile, most sellers would continue to bundle all of their shows into discounted packages and most advertisers would continue to buy these packages, because they would get more valuable consumer impressions per dollar than way than by trying to cherry pick seller program schedules while meeting stiff resistance or being forced to pay huge CPM premiums for that option---even if offered.

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