TV Ad Spend To Fall Below 20% Of Total For First Time

TV ad spending reached its height before the pandemic and will never reach that level again, according to a new study by Insider Intelligence. In 2022, such spending will fall below 20% of total ad spending for the first time.

Insider Intelligence attributes this to the popularity of on-demand content and streaming options.

The researcher reported that TV ad spending grew 6.3% last year, but that came after a 12.5% drop in 2020.

Zach Goldner, forecasting analyst at Insider Intelligence, attributed the rise in 2021 to the return of live sports. In 2022, Insider predicts TV ad spending will rise 4.1% to $68.3 billion.

But Insider foresees a steady drop over the next few years. By 2026, TV ad spending will fall to $64.94 billion. By 2026, TV ad spending will be just 14.3% of the total ad spend.

Oscar Bruce Jr., senior forecasting analyst at Insider Intelligence, blamed streaming for the exodus of viewers. “Given the high cost of traditional pay TV, viewers are shifting to a variety of streaming options that are more affordable and convenient,” he said, adding that such platforms will enjoy growth in coming years as pay TV declines.

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Goldner said connected TV and social video will pick up the slack in 2022, growing respectively at rates of 33.1% and 45.6%.

Advertisers will continue to shift their ad dollars from traditional TV to other video formats. Both connected TV and social video will drive total ad spend in 2022, growing respectively at rates of 33.1% and 45.6%.

“We expect TikTok and Snapchat to boast the strongest growth this year of the social networks we break out,” Goldner said.

1 comment about "TV Ad Spend To Fall Below 20% Of Total For First Time".
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  1. Ed Papazian from Media Dynamics Inc, March 25, 2022 at 8 a.m.

    Todd, most of the old ad spend tallies never included direct mail and other types of sales promotional spending which were often huge but the current figures include all forms of digital advertising which often replicates these traditional sales promotional functions. Moreover,  and search dollars now constitute about half of digital sepnding. There is no counterpart for search in TV.

    My point---which I have raised many times---is that if you take branding campaigns which are not founded on any form of dirct response as your base-- TV's share of ad spend is about 50% while digital's share is far lower.  This differential may alter in future years, but that remains to be seen. For example, as TV branding dollars migrate into CTV and AVOD, shouldn't these be classified as "TV"----not digital?  I think so.

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