A lingering aftereffect of the COVID-19 pandemic is the reduction in advertising on TV. The TV ad spend will never reach the levels it saw before the pandemic. This year, it will fall below 20% of total ad spending for the first time ever, Media Post reports.
Media Post’s Insider Intelligence attributes the decline to the popularity of on-demand and streaming video options.
“Given the high cost of traditional pay-TV, viewers are shifting to a variety of streaming options that are more affordable and convenient,” Senior Forecasting Analyst Oscar Bruce, Jr. said.
While TV ad spending increased 6.3% in 2021, that came after a 12.5% decrease in 2020. The return of live sports helped fuel 2021’s increase, forecasting analyst Zach Goldner says.
This year, Insider Intelligence predicts that TV ad spending will increase 4.1% to $68.3 billion. However, a steady drop is forecast over the next few years. By 2026, TV ad spending will fall to $64.94 billion, according to the report. By 2026, TV ad spending will account for only 14.3% of the total ad spend.
While the ad spending on TV shrinks, growth is expected for connected TV and social video in 2022, posting increases of 33.1% and 45.6%, respectively.
“We expect TikTok and Snapchat to boast the strongest growth this year of the social networks we break out,” Goldner said.