Leading media buyer GroupM sees total TV advertising revenue rising 3.4% in 2022, with a big gain in connected TV offsetting a small decline in traditional TV.
The gain comes despite macroeconomic difficulties including inflation and Russia’s invasion of Ukraine. The numbers include $12.6 billion in election year spending.
GroupM sees total TV ad revenue of $70.7 billion in 2022. The agency breaks that down by traditional TV, down 0.4% to $58.7 billion, and what it calls “connected TV plus” jumping 26.7% to $12 billion.
Connected TV’s share of the TV/professional video market is expected to be 16.9%.
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For 2023, GroupM sees total TV revenue up 1.8% to $72 billion. Traditional TV is expected to drop by 2.2% to $57.4 billion, while connected TV plus is expected to increase by another 21.6%. That would bring CTV’s share to 20.2%.
Despite $4.2 billion in political advertising in the 2024 presidential years (a bigger chunk of that spending will go to digital) total TV will slip 0.1% to $71.9 billion, according to the GroupM forecast. Traditional TV revenues will fall 3.5% to $55.3 billion while connected TV plus adds 14.3% to hit $16.6 billion, with a 23.1% share.
By 2027 total TV spending will be down to $71.3 billion, with traditional TV down to $59.5 billion and connected TV plus up to $21.7 billion, or 30.5%.
For the whole U.S. advertising business, GroupM sees 2022 revenue rising 9.3% to $329.9 billion, excluding that $13.6 billions political spending. Including political, GroupM expects the U.S. ad business to rise 12.6% to $343.4 billion. In 2023, the agency sees spending growing just 2.6%, then accelerating again in the presidential election year of 2024 to 9% growth.
By 2027, GroupM sees U.S. ad revenue at $424.3 billion.
Digital is a big driver, increasing 14.8% in 2022 and taking a 61% share of ad revenues. By 2027, digital’s growth will slow to 6.7%, but it will have achieved a 71% share.
On a global basis, GroupM has trimmed the outlook it released in December, but notes that the ad business isn’t shrinking but continues to grow despite the war in Ukraine, inflation fears, supply chain issue and lock-downs in China.
Positive economic indicators include low unemployment levels, high household savings, strong new business formation and interest rates that, while rising, remain near historic lows.
Cuts in spending by some marketers will be offset by increases from other from others and many of the same factors that drove unprecedented growth for the industry in 2021 will continue in 2022.
Television advertising is forecast to grow 4% in 2022. GroupM notes that because of the local-language programming being developed by streamers in particular is making the TV business more global.
While television remains better than many alternatives for the purposes of satisfying reach and frequency goals, its reduced effectiveness will only encourage marketers to explore alternative strategies, GroupM said. Connected TV environments, including digital ad inventory from streaming services, will capture shares of existing budgets much more than they will drive new ones into the industry. ■
