Emarketer’s updated television ad spend report reveals that television ad spend in the US will decrease by between 22.3 percent and 29.3 percent in the first half of 2020, $10 to $12 billion less than expected in its previous forecast, which predicted a two percent increase in television ad spend for all of 2020—an estimate that was reached before the coronavirus outbreak.
While television ad spend was down last year and eMarketer expected the trend to continue in 2021, the 2020 Summer Olympics and presidential election were expected to offset the downward trend. NBCUniversal estimated ad commitments for the Olympics amounted to nearly $1.25 billion.
Political ad budgets will also be hampered in Q2, in part to avoid insensitivity in light of the pandemic. However, Kantar believes fewer political ads now doesn’t mean less ads later, as it noted in a blog post: “But with travel, rallies, and in-person campaigning severely curtailed, and campaigns striving to maximize communication channels that they can control, paid advertising in general, and television advertising in particular, will likely be the best vehicle for campaigns to deliver the messages they want delivered.”
The cancellation of the Olympics coupled with postponed sports programming such as the National Hockey League (NHL), National Basketball Association (NBA) and NCAA March Madness games will contribute to billions lost in ad revenues for television networks.
A March 2020 study from Kantar found that the aforementioned sports content collectively accounted for nearly $2 billion in television ad revenues in 2019. Similarly, MoffettNathanson Research estimated in March that due to the NBA season cancellation, 2020’s losses to ESPN, TNT and ABC would equate to about $700 million.
Emarketer believes television advertisers will adopt a wait-and-see approach as the economy continues to stall.
