How OTT Growth Impacts TV Ad Spending

In the wake of a number of updated forecasts from major ad agencies -- including one from Interpublic’s Magna suggesting the U.S. TV ad marketplace has essentially entered a permanent ad recession, at least in non-election years -- the statsmasters at eMarketer have released an updated outlook calling for U.S. TV ad spending to erode through 2020.

While agency analyses are generally focused on the shift of advertising budgets to digital media, eMarketer’s analysis focuses on the shift of audience supply from linear TV to over-the-top viewing options.

eMarketer analysts note there is a correlation between cord-cutting, the acceleration of OTT and the erosion of TV ad spending.

“The shift of audiences to OTT viewing is changing the climate of the TV ad market,” states eMarketer Senior Forecasting Director Monica Peart. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic games.”

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