TV Could Lose $5 Billion In Advertising Through 2023: Analyst

Television advertising could lose further share in the wake of rising digital advertising in the next few years -- due to continued growth of small and medium-sized businesses using digital platforms.

Digital advertising will rise by $94 billion through 2023, with TV slipping $5 billion and other media -- print, radio, outdoor -- collectively losing $14 billion, according to MoffettNathanson Research.

“Digital’s gains are primarily coming from attracting new money into the market rather than eating away from TV ad budgets in absolute terms,” says the report -- primarily from small and mid-size businesses.

Total U.S. advertising will rise 33% to $302 billion in 2023 versus $227 billion in 2019, the report says.

TV has been especially hard hit by the recent loss of TV advertising of national traditional retail brands during the COVID-19 crisis. “We believe traditional retail is just one example of traditional businesses likely to cut back on TV ad spend due to top-line pressures from Covid-19,” says the report.

But going forward, TV may benefit from rising big brand technology advertisers -- Amazon, Alphabet, Netflix, Apple, Microsoft, eBay and Facebook. It is estimated that on average, these technology companies spent 20% of their media budgets on television in 2019.

“On the structural health of TV’s core advertiser segments, we believe that weakness among retail may in fact be offset by strength in technology,” MoffettNathanson Research says.

In addition, it says that while accelerating cord-cutting trends are hurting TV, “we expect this will be partially offset by an increase in AVOD [advertising video on demand] spending.”

In 2019, U.S. digital advertising totaled $104 billion, with TV at $77 billion, print at $20 billion and other media at $25 billion.



By 2024, digital advertising will increase its growing dominant share of the U.S. advertising market -- up to 69% in 2024 (from 46% in 2019), MoffettNathanson says.

TV will sink to 22% in four years, from 34% in 2019, while print media will be at a 3% share (down from 9%), with other media going lower to a 5% share (from 11% in 2019).

4 comments about "TV Could Lose $5 Billion In Advertising Through 2023: Analyst".
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  1. Ed Papazian from Media Dynamics Inc, September 29, 2020 at 12:15 p.m.

    Wayne, the critical question is be how many of whatever ad dollars are "lost" by "TV" will be picked up by the networks' own AVOD services as well as other digital ad sellers?In other words the money may simply be going from one pocket to the other.

  2. Gordon Borrell from Borrell Associates, September 30, 2020 at 10:23 a.m.

    Ed, in the history of electronic media dating to radio's entry 100 years ago, then TV, then cable, then the Internet, no incumbent has achieved net gain from trying to incorporate the new medium into its existing business model, as TV companies are doing with OTT.  It has always been a "pureplay" entity that wins the biggest market share. To quote Marshall McLuhan 60 years ago, "A new medium is never an addition to an old one, nor does it leave the old one in peace. It never ceases to oppress the older media until it finds new shapes and positions for them."

  3. Ed Papazian from Media Dynamics Inc, September 30, 2020 at 11:20 a.m.

    Gordon, it al depends on how you define a medium. In my book, radio and TV were quite different media because of the way they communicated with audiences and how advertisers could use them to promote their products or services. When it comes to TV and "digital"( or "streaming") I regard both as the same medium---differing only in the ways that audiences access them. The content is conveyed via a screen and uses that famous method--"sight, sound and motion" ---to tell its stories or present ad messages. In fact, many of the programs are exactly the same---like movies and reruns of off-network series---although there are "exclusives" for both "linear TV" ( news, sports, talk shows, specials, etc. )  and streaming. I also expect that the advertisers will use basically the same types of ad messages---commercials---in both, though special tailoring of content and length may be required for some streaming venues.

    What I see happening--and it's just my interpretation---is a serious attempt by the TV powers that be---Disney, CBS, NBCU, Discovery, etc. to capture a major share of the growing streaming audience for ad-supported services as well as pure SVOD---in order to compensate for the erosion of their "linear TV" base. It makes perfect sense as success with these  new SVOD/AVOD ventures will be a hedge against future reductions----or levelling off---of their re-transmission incomes which have become vital to their profits as networks. So as fewer homes subscribe to "pay TV" the networks will substitute SVOD/AVOD subscriber revenues  for their current re-transmission fees while maintaining ---or even growing---their ad revenues which will now come from two sources---"linear TV" ---what remains of it---and AVOD. It's a smart move and I beileve it will work--albeit with some pain here and there.

  4. Kuminga Ufulbu from Africa SEJ supporting, October 3, 2020 at 4:49 p.m.

    I'm seeing alot of money about networking .the presidents planed .so what is about health,and hunger plan to new year ? because many people are suffiring to these ways.
    and when they will remember poorest in Africa?

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