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National TV Ad Market to See 13% Dip, Per MAGNA

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NEW YORK—National TV advertising is expected to see a 13.2% decrease in the U.S. market for 2020, with the coronavirus shutdown outweighing the typical gains that political ads generate in an election year, according to a new report from investment and media intelligence resource MAGNA.

MAGNA projects that linear advertising sales—which encompasses linear TV, radio, print and OOH—will see a net loss of 13%, equating to about $83 billion. MAGNA says without political ad revenues ($4 billion), the decline would have come out to -17%.

While linear TV saw a surge in viewing for the first few months of the quarantine, the loss of sports and the greater economic impact on national and local businesses limited the amount of advertising revenue for that period. Now, TV viewership habits are reverting back to their pre-COVID numbers as social distancing restrictions are beginning to ease.

Local TV ad revenue is also slated to see a decline, though at -2.4%.

The recovery between national and local advertising is expected to differ vastly, per MAGNA. National TV is forecasted to see a 4.3% increase year-over-year in 2021, but local TV—with no election helping to boost sales—could see a decline 14.5% year-over-year.

“Many industries face significant economic headwinds and have been forced to cut considerable amounts of spend as a result,” the report reads. “The travel, entertainment, automotive and restaurant industries will be among the most affected, and MAGNA expects each of those industries to reduce linear advertising spend by -25% or more on a full year basis.”

Digital is among the advertising formats that has remained resilient during these times, directly benefiting from increased consumption habits. MAGNA expects for ad spend on digital formats—search, video, social, banners, digital audio—to stabilize in the summer and recover in the second half of 2020 to the point of stability or even some modest growth year-over-year (2%). Digital video is expected to see the most growth at 10%.

Overall, across all platforms, U.S. advertising revenue is projected to decline 4.3% in 2020 and then recover in 2021 with a 4% growth, according to MAGNA.

MAGNA also shared data for global advertising revenue, with linear TV ad revenues shrinking by 12%, and the entire range of global advertising revenues decreasing an estimated 7%.

For more information, the full report is available on MAGNA’s website.