Is TV in a Permanent Ad Recession?

Data and tech are supposed to stop the bleeding. So far they're not

By most accounts, the advertising business has shaken off the uncertainty and doldrums of the first half of this year:

• In September, analyst Brian Wieser predicted that US ad spending would grow 5% this year

• That followed The Wall Street Journal’s June report that “Global Advertising Forecast to Speed Up After a Slower Start in 2023. GroupM expects ad spending to grow 5.9% this year to $874.5 billion”

• There is more optimism in the industry overall

• Google, Amazon, Meta, Pinterest and others recently exhibited healthy growth numbers -indicate that brands are spending at a high level again

• The US GDP had a “blowout” Q3

• Job numbers keep surging, inflation is coming down, and people keep shopping

In another time, all of these factors would bode very well for TV advertising.

That fact that they’re not is - troubling.

Ad sales tend to get lost these days in the slew of media company earnings reports, as they gets eclipsed by streaming subscriber gains, Disney board fights, Barbie box office numbers and so on.

But something is going on with TV - it’s not bounding back:

• Warner Bros. Discovery reported a 12% ad skid

• Comcast’s US ad sales fell 8.4%

• Fox - down 2% in Q3

• Paramount - minus 14%

• And now Disney - you guessed it

Axios’ Sara Fischer summed up the state of affairs quite well here.

On the one hand, this shouldn’t be all that surprising, given that linear TV is shrinking, while streaming, YouTube, TikTok, etc. are surging. On the other hand, what does this say about the TV ad industry’s much-hyped efforts to modernize and expand around data and technology? Consider that we constantly hear that:

• CTV advertising is booming

• Advanced TV advertising - ranging from data-driven linear to the use of clean room technologies to uber-targeted digital ads - are all collectively making TV advertising more effective and accessible

• Better measurement

• New forms of attribution

• A supposed influx of DTC brands and smaller advertisers that will make the pie for TV advertising much bigger

So far, all these advancements don’t seem to be showing up in the numbers. What gives? Is it the simple matter of - you can’t shove a $70 billion ad market built on tonnage into a smaller container? Are brands not interested, or capable of using these new tactics as much as we’ve been lead to believe?

Or is this party just striking midnight?

We’ll see. Maybe TV advertising has a killer Q4. Maybe marketers just need time to catch up on all these new means of buying TV ads.

Or maybe TV has passed the point of no return.