• by Wayne Friedman , July 22, 2022

With a strong probability of a recession to start by the end of year, according to many analysts, a new estimate projects that a downturn in the economy could drive a 9.6% decline in TV advertising this year to $78 billion, according to MoffettNathanson Research.

An estimate with no recession projects total TV advertising would rise 6% to $86 billion -- from $81 billion in 2021.

MoffettNathanson also projects that a possible recession, beginning this fall, would last throughout 2023 -- about five quarters in total duration. For  next year, that would mean another 5% decline to $74 billion for total TV advertising.

With these projections, TV would not recover until 2024 -- a Presidential election year, when it would see a boost from political and Olympics advertising revenue.

At the same time, MoffettNathanson expects U.S. digital media to maintain growth -- although with slower gains -- during a coming recession, rising 5% to $176 billion (from $167 billion), and then another 6% to $196 billion.

Without a recession, MoffettNathanson had anticipated that digital media would see 15% hike in overall ad revenues in 2022, and another 14% gain in 2023 to $219 billion.

Looking at all U.S. advertising, it sees a 1.4% decline to $283 billion this year as a result of a recession. Without a recession, it estimates 9.7% growth to $315 billion.

MoffettNathanson Research based its results on some recent historical downturns in the economy, with resultant ad revenue against U.S. gross domestic product.

For example, with the 2000-2001 recession, the ratio of U.S. ad spend-to-GDP dropped to 1.29% from 1.48%, while for the 2007-2009 recession it dropped to 0.99% from 1.23%.

For this year, MoffettNathanson projects that with no recession, the ratio would be 1.27% -- but with a recession, this ratio could drop to 1.16% this year and 1.17% next year.