As TV viewing continues to change, marketers are trying to keep pace. That means spending on traditional TV ads will fall by $1 billion to drop below the $70 billion plateau for the first time since 2015, according to a new forecast from eMarketer.
With cord-cutting and over-the-top (OTT) viewing continuing to accelerate, total spending on TV ads will slip 0.5% in 2018 to $69.87 billion. As a result, TV’s share of total U.S. media ad expenditures will drop from 33.9% in 2017 to 31.6% this year.
The dollars that historically went to television are not simply going to disappear, of course. The eMarketer study predicts that total digital ad spending in the U.S. will rise 18.7% this year to $107.3 billion. OTT services are a small slice of the overall digital market, but their share is growing and they have fewer clouds over them due to issues around privacy, viewability or brand safety. Roku’s U.S. ad revenues, the study cited as one example, will soar 93% this year over 2017, surpassing $293 million. Hulu, which offers both an ad-supported basic subscription and a premium, ad-free version, recently hit the $1B mark in the ad column and is forecast to post 13% growth this year, to $1.12 billion.
Marvel's 'Howard The Duck', 'Tigra & Dazzler' Animated Series Scrapped At Hulu
“The shift of audiences to OTT viewing is changing the climate of the TV ad market,” said eMarketer senior forecasting director Monica Peart. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic games.”
Losses of video subscribers have continued apace for many top distributors. While executives at major cable operators, satellite providers and telcos once proclaimed cord-cutting to be a myth, one by one they have been forced to concede that their subscribers are being lured away. Several have countered by rolling out more flexible options without contracts, or in the case of DirecTV and Dish Network, “skinny-bundle” services delivered via the internet. Those subscriptions all together have reached between 5 million and 6 million, according to most estimates — still a fraction of the pay-TV universe but a growing segment.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.