7.8% decrease in advertising sales in 2017!
Why would advertisers finally be leaving TV for good? Because the viewers are leaving. Also for good.
Largest Decrease in 20 years
Television-advertising sales fell 7.8% in 2017. That was the largest decrease in Television advertising dollar spend in the last 20 years. Apparently, the first part of 2018 has not cancelled that decline. The dollars are committed elsewhere. Google and Facebook have increased their online investments to take control of the advertising dollars in the marketplace. Online is rising.
Online spend rising and television spend decreasing is a budgetary formula. The budget dictates x dollars spent. If 45% is marked for Google and 35% for Facebook, the television must decrease to 20% or less.
Because Television ad sales made such a drastic reduction during a market where globally there has been strong advertising growth, “leading firms and analysts predict that the business may never recover,” a conclusion offered in a Bloomberg article by Lucas Shaw.
Who are these viewers leaving?
Viewership of people 18 to 49 has dropped more than 10% over 2016. These viewers are considered “most important” to advertisers for their purchasing power and for the pattern of their spending online.
One might think that events like the Supper Bowl, with its enormous ad costs, would be immune to the general pattern. They are not. They are also losing viewers. The most watched, NFL programming, has fallen for two years in a row.
Technology Disruption
This loss of viewership from the technology of Television to the technology of the Internet, is an example of technology disruption.
The real force of the disruption is not so much that the new technology itself displaces the old technology. Technology unused sits on the shelf, so to speak. But when consumers become users of the new technology, their growing use of the new displaces the old.
Life-Pattern Change
It is this changeover in the life-patterns of users that dictates the rate of disruption in the technology. If hundreds are flying drones that is one level of disruption. If millions are flying drones, an entirely different level is indicated. Then the FAA enacts laws to control the disruption!
Watching the KCAL 9 offering of news and weather, does not indicate that I don’t have a more accessible, commercial free source (my cell phone), but speaks to habit. When habits change, the television networks have fewer viewers. That’s disruption that is powerfully unavoidable and is evidenced by the movement of the advertising dollar.
