TV advertising to remain resilient despite online streaming, Deloitte predicts

TV advertising will defy the doom-mongers in both the US and UK in 2017 despite the rise of online and on-demand viewing, according to an annual forecast by Deloitte.

"Traditional TV appears to be retaining its mass-market appeal, unlike streamed TV," the consulting firm said in its technology, media and telecommunications predictions report.

Deloitte predicts that TV ad revenues in the US "will likely be flat" at around $72bn (£59.4bn) in 2017, even though there is no major sporting event such as the Olympics.

Deloitte is also bullish about the UK TV advertising market, suggesting it will be "flat relative to 2016" at around £5.3bn, although some media industry observers are more downbeat because of fears about the continued fallout from Brexit.

Measuring TV ad revenues has become more complex in recent years, depending on whether figures include sponsorship and video on demand.

Deloitte said industry fears that TV viewing is declining may be overdone and suggested a sharp fall in US TV sporting audiences may have been temporary in the run-up to the Presidential election.

"Daily television viewing remains robust, ad-skipping is relatively limited and older viewers are watching slightly more TV," the report said.

Ed Shedd, head of tech, media and telco at Deloitte, said: "The death of television has been declared all too often in recent years."

He added: "Commercial television – despite modest year-on-year declines in viewing numbers – is likely to be one of the few media capable of delivering, on a daily basis, audiences in the millions per programme. As long as this maintains, advertisers are likely to remain faithful to TV.

He said: "We expect traditional TV to continue co-existing with digital advertising and content. Advertisers should consider which products are best advertised on TV and which on digital.

"In this omnichannel world they need to make all their different ad channels work together, rather than trying to pick a single ‘winner-takes-all’ medium."

Paul Lee, director of TMT research at Deloitte, said part of the reason that TV advertising has remained resilient is that newspaper advertising’s reach has declined because of falling print circulations.

He added that online viewing on ad-free platforms was on the rise but Netflix was still a niche, representing in the region of 5% of viewing time.

A significant chunk of online viewing is short-form content on mobile, with the sound sometimes off, and is not a substitute for TV, suggested Lee.

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