Linear audiences have been shrinking for years, and now TV advertising dollars could be falling too.
U.S. TV ad spending is projected to drop almost 3% this year to $70.3 billion, and may never return to its $72.4 billion high in 2018, according to a new eMarketer forecast.
While U.S. TV ad spend—including broadcast and cable TV linear spend, but not digital—will undergo a 1% bump next year thanks to the presidential election and the Summer Olympics, it’s projected to fall 1% each subsequent year to $68.9 million in 2023.
This year, U.S. TV’s share of total ad spending will fall below 30% for the first time ever. By 2022, estimated eMarketer, it will fall below 25% of total U.S. ad spending.
“TV ad growth can be heavily impacted by world events, so it’s possible that spending could return TV to $72 billion again,” said eMarketer forecasting director Monica Peart in a statement. “But it is unlikely that it will exceed that going forward, as ratings and viewership declines accelerate.”
The decline in U.S. TV ad spend comes as cord cutting continues to accelerate, fueled by the rise in streaming services like Netflix, Hulu and Disney+, which rolled out Tuesday. In 2018, high buys were fueled by the midterm elections, among other things. Buyers also kept their money in linear even as ratings fell. Now, they are seeking other options for some of that money, including connected TV.
In July, eMarketer projected that U.S. cord-cutter households will jump 19% this year to 21.9 million, causing the number of pay TV households to fall to 86.5 million. By 2023, the number of pay TV households will be 72.7 million.
As cord-cutting grows, connected TV ad spending is expected to increase, eMarketer forecast last week. It will grow to $7 billion this year, top $10 billion by 2021, and reach $14 billion by 2023, when it will account for 4.7% of total media ad spending.