TV remains ‘resilient’ as edgy marketers worry about brand safety and digital ROI

Linear TV advertising revenues will rise by 3% in 2018 fuelled in part by nervous marketers worried about brand safety and uncertain returns on investment in digital channels, a report from IPG has found.

While the FIFA World Cup, winter Olympics and political advertising will all contribute to the increase – revenues would only be marginally up without such events – the “resilience” of TV is also caused by deeper underlying factors, the company said

In its global advertising forecast – one of several released by the ad giants this week – IPG agency Magna concluded there remains “sustained demand” for TV from large consumer brands in the CPG and FMCG sectors.

In addition, some marketers are edgy about digital, it said.

“Because some marketers are concerned about brand safety and ROI accountability in digital environments, many brands have paused the long-term diversification of their media mix towards digital formats and have instead remained loyal to traditional linear television in the last 18 months.”

Ad sales growth in Asia Pacific by country. Singapore is the only market in the region expected to decline in 2018

The report added that sustained demand combined with declining ratings is driving a high CPM cost inflation in the range of 5% to 15% in key markets.

Strong TV pricing, however, is “barely offsetting” declining volumes resulting in flat revenues for broadcasters in Japan, France, UK and Italy.

Magna also noted that TV is evolving with ‘advanced television’ providing advertisers with qualified audiences with less wastage and better engagement.

But in Malaysia however, Magna noted there had been “significant changes” in viewing behaviour with younger people moving towards digital and paid and free on-demand streaming sites.

As a result, TV growth will remain flat in 2018 while digital will climb 14%.

Globally, digital inevitably remains the growth area, it added, predicting revenue increase in 2018 of 15% to $250b, down slightly from the 18% growth in 2017.

Digital sales will represent 45% of total ad sales by the end of 2018 with Magna predicting it will hit 50% by 2020.

Social advertising is forecast to rise 31%, video by 27% and search, still the largest ad format, by 14%.

“Despite the scale reached by digital media spend and the controversies that hit some of the media owners in the first half of 2018, digital ad spend has showed no sign of slow-down yet,” the report states.

“The combined advertising revenues of Google and Facebook grew by 31% year-over-year in the first quarter of 2018. Nevertheless Magna does anticipate a mild slow-down in the second half of the year.”

Yet so far, the report noted, spending from small, local direct advertisers continues to grow, offsetting any slow-down in the spending from brand advertisers.

In Asia Pacific, ad revenue is forecast to climb almost 7% in 2018, up from 5.9% previously forecast by Magna.

TV revenue in the region is expected to climb 2% this year, with digital rising 17% – slightly below last year’s 18% – with print down 8%.

Singapore is expected to be the only market to shrink in 2018, by an estimated 2.2%, although it is tipped to rebound in 2019 with forecast growth of 1.3%.


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