National television advertising is expected to grow 5.1% in 2021 after plunging 15.1% in 2020, according to a newly revised forecast from media agency Magna.
Magna said it expects spending to rebound after registering an 18.5% drop in the first half of 2020, when the economy was pummeled by the COVID-19 pandemic.
“The upfront sales system, where volumes and rates are negotiated and locked for the entire broadcast year, limited the decline for national TV (even though many campaigns and upfront commitments were cancelled)," Magna said.
In 2020 local TV will benefit from record political spending of $5 billion, but still fall 4.6%. For 2021, Magna sees local TV down 17%.
Excluding the election and other cyclical events, local TV advertising is expected to be down 19.7% in 2020 after falling 25.1% in the first half. For 2021, local TV ad spending, excluding political ads, will decline 1.8%.
Overall, Magna expects U.S. ad spending to rebound 4% in 2021, driven by a recovery in consumption and mobility and the return of normal schedules for TV shows, sports and the Olympics.
Ad sales were down 7.2% in the first half of 2020. Digital ad sales were up 5.7%, while linear media fell 23.1%.
Magna expects the market to be down just 2% in the second half of 2020 as parts of the economy reopens and political candidates spend big dollars.For the full year, U>S. ad spending is expected to be down 4.6% to $213 billion.
“The COVID crisis has hastened the normal end of the economic cycle and brought on the worst recession ever. In this context, classically, branding budgets and linear media spend are cut disproportionately while lower-funnel market mechanisms and digital ad formats show much greater resilience, boosted further by the acceleration of e-commerce in the COVID and post-COVID world,” said Vincent Letang, executive VP for global market intelligence at Magna.
“The sheer size of digital advertising in 2020 (approx. 55% of the US ad market) and its resilience in this economic environment explains the relatively modest decline Magna forecasts for the whole year (-4.6%) despite the severity of the economic recession, compared to the double-digit decline 2008-2009 (-12%) when digital media was still nascent,” Letang said. “For linear media, however, 2020 remains brutal, but Magna is confident that ad revenue will stabilize and recover in 2021”.
