TV Ad Sales Tumble To 2009 Levels Amid Cord Cutting And Recession Threat

via Zerohedge:

The Interpublic Group of Companies’ research unit Magna has reported global television advertising sales plunged 4% in 2019, one of the steepest declines since the financial crisis as the global economy continues to decelerate through Q4, first reported by Bloomberg.

Magna estimates that global television ad sales contracted by 4% in 2019, one of the worst years since the 2008/9 financial crisis, as advertisers pulled back on spending and also shifted ad spending to the internet.

Recent declines in TV viewership have suppressed television ad sales. It was determined that viewership plunged during the year in the US, Europe, China, and Australia.

“Almost everywhere now, we have linear viewing declining double digits, or high single digits,” said Vincent Letang, EVP of global market intelligence at Magna.

Cord-cutting has been a significant driver of the demise of cable television. Consumers are opting for online streaming services, not just in the US, but across the world.

Even with a 19.6% plunge in global print ad sales and 3.6% slide in global traditional television ad sales over the year, the industry as a whole was propped up by tremendous growth in global digital ad sales.

Magna said global ad sales spending would increase by 4.6% in 2020, though at a much slower rate than 5.2% so far recorded in 2019.

National television ad sales in the US saw a drop over the year, estimated to be around -3% to $42 billion, and will likely slow in 2020 as a mild recession could appear in the back half of the year. A slowdown in the economy could further dent television ad sales; one of the sectors pressuring the decline is the automotive industry.

US TV ad sales will remain slower in 2020 but could see artificial boosts at specific periods during the year thanks to the presidential election and the Summer Olympics. Technology and entertainment ad spending could offset weakness in print and television ad sales.

As the overall global ad industry slows with the threat of a worldwide trade recession next year, the cracks are already beginning to show as print and television ad sales stumble. Slowing global trade in the quarters ahead will continue to compress profit margins for companies across the world and lead to declining advertisement spending. The world is entering a period of ‘slowbalisation.’




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