• by Wayne Friedman , September 16, 2021

TV’s strong growth in advertising revenue -- up 31% in the second quarter of this year -- looks to be short-lived, according to a report from MoffettNathanson Research.

The recent gains are largely due to the impact of the COVID-19 pandemic on the second quarter 2020, when TV was down 29% and digital media slipped 1%, according to estimates.

Now look for TV growth in particular to decrease for the rest of the year.

MoffettNathanson expects TV to see a much smaller 6% bump in the third quarter and an 8% decline in the fourth quarter.

These projections do not include new premium streaming advertising video-on-demand platforms.

“TV is having a nice rebound in demand as well, but we are concerned about the sustainability of CPM inflation to offset double-digit ratings declines. Accordingly, we anticipate TV’s advertising growth will be short-lived and will turn negative by 4Q 2021,”  the authors say.

While TV showed strong gains in the most recent period, industry-leading digital media advertising posted an even better 62% increase. A major part of this improvement are the results from Google, Facebook, Twitter and Snap.

Digital media will continue to see solid double-digit percent gains for the rest of the year -- 41% higher in the third quarter and up 29% in the fourth quarter, MoffettNathanson says. 

“Structural shifts in the economy, from the digital transformation of businesses, the movement of below-the-line marketing services spend into measured media, the acceleration in ecommerce penetration, and the growth in SMBs are fueling these impressive online advertising results,” it notes.

As traditional TV faces continuing uncertainty, the research group says ad revenue for TV-related, premium streaming ad-supported video platforms continues to spike -- up 108% over a two-year second-quarter period (2021 versus 2019).

During that period, digital/online advertising was up 60% and TV stations were up 4%, with local cable operators adding 2%. Local TV and cable benefited in a big way from a record strong 2020 political advertising season.