Standard Media Index: U.S. Advertising Marketplace Up 8% in 2019
What: Standard Media Index has released market actuals and updated media forecasts through 2023. SMI expects the full U.S. advertising marketplace to expand by 8% in 2019.
Why it matters: The TV market is heavily concentrated; the top seven media owners account for 84% of ad spend season-to-date. Through April 2019, upfront revenue is down 0.5% annually. On a two-year basis, upfront revenue was down 3.6% on an average weekly basis.
According to Standard Media Index’s forecasts, U.S. advertising could expand by 8% in 2019 excluding cyclical events like the Olympics and World Cup. While major marketers are anticipated to grow a mere 2.5%, small and medium-sized businesses (SMB), who generally self-manage their ad spending through digital tools, will grow by nearly 14%.
SMI has noted that major marketers have limited incremental investments in search to a +1.6% growth level through the first four months of 2019, down from double-digit growth in 2018. Similarly, incremental investment in social has been reduced to +24% growth level through the first four months of the year from +50% in the same period last year. According to SMI, social grew by over US $150 million in the January to April period in 2018, while in 2019 that figure was "only" US $25 million.
Ad formats across all digital platforms are showing long-term growth. On a two-year CAGR basis, audio is up 7%, search is up 10%, display (driven by social) is up 11%, but video tops the list with growth at 15%. Actually, video is the dominant content and ad format in the U.S. among major marketers, as 63% of ad spending is being invested with video publishers or, growingly, digital video ads on non-video publishing.
SMI points out that the TV market is heavily concentrated; the top seven media owners account for 84% of ad spend season-to-date (Oct. 2018 - Apr. 2019). However, the actual delivery of the 2018-2019 season-to-date is not experiencing the level of advertising activity expected last summer, when it was reported upfront demand was between +3% to +4% overall. In reality, through April 2019, upfront revenue is down 0.5% annually. On a two-year basis, upfront revenue was down 3.6% on an average weekly basis.
|Top Media Owners (2019-to-date)|
|10.4%||(new) Walt Disney|
|5.5%||AT&T (incl. WarnerMedia)|
|4.2%||(new) FOX Corp.|