NEW YORK—Though performing better than initially expected in 2020, the national TV advertising revenue for the U.S. is expected to see a jump of 4.6% in 2021, according to a new report by Magna Global. Helping to drive this growth is the rollout of vaccines and the return of delayed cyclical events, including the Tokyo Olympics.
The U.S. economy, while still worse than the 2009 recession (-2.5%), actually fared better in 2020—contracting by -3.5%—than had been initially expected (-5.5%) in May. Media revenues helped in this regard, as linear and digital total advertising revenues fell by just a combined 1% in 2020, representing a loss of $221 billion, a milder decrease than expected.
Digital was the primary factor, growing 10% from its 2019 numbers, thanks in large part to political spending. Linear advertising sales saw a decrease of 16%, equating to $81 billion. National TV linear ad sales decreased 11%, while local TV only by 3%, though Magna says it would have been significantly more without political ad spending.
If vaccinations occur as expected and major cyclical events like the Olympics return, Magna projects that the U.S. national TV ad revenue will increase by 4.6%—the Olympics will account for $800 million in ad sales, per Magna.
Local TV, however, is not expected to fare as well. With the absence of political spending, Magna estimates that local TV ad revenue will drop 20.4%; excluding political advertising, 2021 is still estimated to be 3.7% lower than in 2020.
Overall, traditional linear advertising revenues (including print, radio, out-of-home, cinema and direct mail) is expected to decrease -2.8% in 2021. Digital, meanwhile, is projected to keep growing by 8% overall, while online video is forecasted to increase 11.8%.
“Back in the spring, Magna predicted that digital media organic growth factors would drive digital to grow despite the COVID recession (+1% globally, +3% in the U.S.),” said Vincent Létang, executive vice president, Global Market Intelligence at Magna. “It turns out digital media resilience was even stronger than expected (+8% globally, +10% in the U.S.) and possibly because of the changes brought by COVID. The pandemic triggered a tremendous acceleration in both supply (digital media usage and audiences, ecommerce) and demand: small businesses embracing digital media to keep their business alive during lockdowns, big brands pivoting towards lower-funnel marketing channels as they typically do in recession times. Magna believes the return of consumer mobility, major events and economic recovery will prompt most industry verticals to grow their linear advertising budgets in 2021, but the long-term trajectory has shifted even further towards a digital-centric marketing environment for years to come.
The full Magna report is available online.
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