According to Emarketer, US upfront TV ad spending will decline by 1.4% in the 2019-2020 season to $20.28 billion, dropping a substantial 27.1% in the 2020-2021 season to $14.78 billion, a $5.5 billion difference year-on-year. The change contradicts pre-covid estimates, which predicted single-digit growth for both seasons at 2.3% and 1.8%. The revised numbers reflect ad spending of USD 1 billion less for this past 2019/2020 season and USD 7 billion less for the next season in comparison with April 2019 forecasts.
Campaign delays and suspensions paused spending during H1 2020 as live sports programming stopped, and the economy began to suffer. Advertisers had the choice to cancel up to half of their upfront commitment during the third quarter, a relatively rare occurrence, and the number of cancellations will be greater than expected before the pandemic, due to additional economic uncertainty.
Advertisers will likely make significant adjustments to their upfront spending in the 2020-2021 season. An April 2020 BMO Capital Markets study found that upfront inventory sales are expected to account for between 40% to 60% of total US TV network inventory, compared to the usual 70% to 80%.
In H2, brands will cut a significant share of TV upfront ad spending as a result of economic hardships. Due to the uncertainty, brands are planning less of their TV buying, which normally gives advertisers about half a year to plan a campaign, and will likely run under inventory that in short timing.
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