An Ampere Analysis study revealed that US TV ad revenues declined by 9.3% in 2020, serving as the greatest TV ad revenues since the Great Recession of 2009, with many broadcasters seeing figures plummet as much as 31%. The industry, however, recovered from the severe impact caused by the pandemic during the fourth quarter.
Supported by a surge in political advertising as a result of the November Presidential elections and the return of live sports on TV, US TV ad revenues reached $17 billion in Q4 2020, a 3% increase compared with the last three months of 2019.
Vaccine distributions are projected to further boost the TV advertising market this year. Other events set to further increase ad revenues include the Summer Olympic fames. The researcher expects figures to grow by 11% this year, teaching $52.3 billion.
While US broadcasters will certainly welcome the strong Q4 performance of TV advertising, the effects of this recovery are unlikely to be long-lasting. In the last election cycle television advertising was an important aspect of political campaigning, but it is hard to predict whether that is a phenomenon that will repeat itself in the next elections, as viewing continues to migrate online. Furthermore, as a flurry of ad-supported online video services are launched by conglomerate studios such as ViacomCBS, Paramount, and broadcasters might find their subsidiaries compete with each other for additional advertising revenue. For these reasons, we expect TV advertising revenue to revert to a generally long-term declining path following 2021.
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