- TV advertising sales dropped 7.8% to $61.8 billion in 2017, the steepest decline in at least the past 20 years outside of a recession, according to new data from Magna Global cited by Bloomberg in a report. Sales at cable networks declined for the first time in nearly 10 years, and outside of cyclical live TV events like the Super Bowl, Winter Olympics and the U.S. midterm elections, 2018 isn't looking any better.
- The decline in ad sales is directly related to a decline in TV viewership and also Google and Facebook's increased investments in video and capturing of most new ad dollars in the marketplace. Even as TV ad sales have dropped, global advertising has grown, which has led analysts to predict that TV may never recover to its previous highs, Bloomberg said.
- Advertising makes up about 41% of sales at CBS Corp. and nearly 30% at Fox. All four major TV networks have experienced a more than 10% decline in viewership among people age 18 to 49, an age group coveted by marketers.
As TV ad buys have gotten more expensive over the past several years, marketers are starting to feel like they're not getting their money's worth. While it's unlikely that there will be any sort of "death of TV," the Magna Global findings underscore the considerably diminished role the channel is taking on and how it might not be a must-buy for brands in the near future.
The price of a 30-second Super Bowl commercial averaged north of $5 million in 2017, a figure that likely carried over to this year's big game despite ratings dropping to their lowest level in eight years. While destination live viewing events like the Super Bowl still draw a large audience, general viewership has plummeted from a cord-cutting trend, and marketers are realizing their ad dollars might be better spent elsewhere. For the Winter Olympics this year, major brands including General Motors, Proctor & Gamble and AT&T are all expected to cut back on their TV ad spending.
The number of pay TV subscribers, now at 73%, continues to drop, as the number of cord trimmers grew from 22% in 2016 to 27% last year and cord cutters grew from 17% to 19%, according to a recent analysis from PwC. Social media video and streaming services are grabbing more of people's attention, and some TV networks, including Fox, CBS and Disney, are creating their own digital video services, some of which are ad-supported, in order to stay competitive and relevant to younger viewers.