September 11, 2015
According to new figures released by Moffett Nathanson Research, the growth of online ads will have a significant impact on traditional television and other media. Analyst Michael Nathanson predicts that ad spending on TV will decrease by 3 percent annually through 2020. He also forecasts that online advertising, led by tech giants Google and Facebook, will increase annually by 12 percent over the next five years and exceed spending for TV ads by 2017. The forecast comes as cable TV ratings are down 9 percent and 566,000 cable and satellite subscribers canceled their service during Q2.
As online video and social networks attract an increasing number of ads, Nathanson predicts that digital advertising in the U.S. will more than double from its 2014 figures to $100.6 billion in 2020. This is expected to have a notable impact on traditional TV.
“There is an increasing belief among advertisers that selling their messages on TV is a blunt instrument compared to the precision of online targeted ads,” reports The Washington Post.
“Ratings for viewers age 18 to 49 are expected to drop by 5.5 to 6.5 percent each year for the next five years. The greatest declines in traditional TV viewers are among 18 to 24, a highly mobile phone-centric cohort.”
While sports will likely remain television’s best defense (multiple networks have signed long-term contracts with organizations such as the NBA, NCAA and NFL), the “most vulnerable will be the ‘long tail’ cable networks,” explains The Post, “those middling networks that don’t get high ratings but were added to big cable bundles as experiments and to fill niche interests.”
IBC Panel: Is TV Reckoning With the Internet Era?, The Hollywood Reporter, 9/10/15
U.S. Consumers Now Spend More Time in Apps Than Watching TV, TechCrunch, 9/10/15