Nope.
Before the coronavirus pandemic, the TV networks were expecting a strong 2020. The presidential election and Tokyo Olympics would keep people watching, and companies would spend more than usual on commercial time.
But with the Summer Games postponed and campaign rallies on lockdown, television advertising revenue is likely to drop 12 percent this year, according to a projection by the research firm MoffettNathanson. Networks will lose out on $25.5 billion in spending, according to a report released on Thursday by the WARC research group.
Viewership is not the problem now that millions of homebound people have limited entertainment options. But the economic fallout of the pandemic has caused companies to slash TV ad budgets by more than 40 percent, according to the research firm Kantar. In response, networks have offered commercial time at double-digit discounts.
“TV was already in the middle of a huge revolution, and it’s only going to intensify, because now advertisers’ money is tight,” said Jane Clarke, the chief executive of the Coalition for Innovative Media Measurement, a trade group.
Before the pandemic, 30 percent of ad spending in the United States went toward TV commercials, while 56 percent went to purely digital platforms. By the end of the year, “this gap is really going to blow out,” with TV “falling more dramatically,” said Michael Nathanson, a founding partner of the MoffettNathanson research firm, in a recent conference call with clients.
And more companies are demanding proof that TV commercials actually work. As online platforms like YouTube
make a play for TV advertisers, networks are making the argument that they can match certain ads to specific households and track how many sales result.
“Advertisers have a lot more questions about actual metrics, and they’re putting fewer dollars in less accountable environments where it’s harder to measure results,” said Tal Chalozin, the co-founder of Innovid, an ad-tech company.
The pandemic has forced many companies to be more efficient with their advertising because they have less money to spend, said Ms. Clarke of the Coalition for Innovative Media Measurement. The crisis may encourage more ads made for owners of internet-connected TVs, using data to deliver customized messages to specific groups of viewers.
People are watching more television these days. But companies are spending less time, effort and money on TV ads.
www.nytimes.com
