Broadcast sellers currently have a lot of optimism about traditional media revenue in 2022. Political advertising is providing a much-needed boost. New categories like online sports betting are a windfall for TV and radio, and most industries have fully recovered from the pandemic. It would be great if these improvements were sustainable. However, the data suggests declines are ahead.
So, how will you fill the gaps and provide your advertisers with a portfolio of advertising options? Third-party digital is poised to do just that.
A Look at the Numbers
According to BIA Advisory data, traditional media revenue will increase by 11.4%. The numbers for 2023 and 2024 show a retraction.
Digital advertising, on the contrary, has a projected growth of 22% in 2022, 12.9% in 2023 and 8.4% in 2024.
The projections for TV broadcast revenue will likely slip after 2022. eMarketer projects a 3% drop in 2023. Pew Research has published estimates as well. They predict that 2023 TV OTA revenue will shrink to $15.39 billion. It will then get a boost in 2024 from political to hit $18.76 billion, falling again in 2025 to $15.49 billion.
Radio has a similar fate; it gets a boost in 2022 and then fluctuates with minimal growth. The expected CAGR (compound annual growth rate) is only 1.9% from 2022 to 2028.
Competition for ad dollars is fierce, as advertisers find more targetable options like OTT, CTV and SEM (search engine marketing).
What’s key for media sellers is not to resist the encroachment of digital but to embrace it. When OTA ad revenue falls or experiences minimal growth, digital is the ideal supplement.
Welcome Digital into Your Inventory to Meet Advertiser Needs, Boost Revenue and Deliver Integrated Campaigns
Third-party digital isn’t your adversary. There doesn’t need to be an either-or situation in OTA vs. digital. Broadening your portfolio of options and making it easy for your team to sell it will be worth it.
First, you can fulfill advertisers’ desires for a diversified advertising mix. They want to be on local TV and launch SEM campaigns and OTT/CTV ads. You can take care of all their needs, and they’ll appreciate one point of contact and consolidation of their spending.
Second, digital will be the lifeblood that keeps your numbers growing. You may think that local advertisers are fine running digital through self-service. The reality is that it requires a strategy and skill sets they may not have in-house, so those ad dollars aren’t producing for them. Your salespeople can become those experts, supported by digital advertising training that enables them to capture those dollars and deliver returns.
Third, you’ll be able to provide integrated campaigns that marry OTA and digital. In this way, you can help them with the broad reach of broadcast and the targeting capabilities of digital. It also aligns with how people make buying decisions, interacting with multiple content channels during their research.
A report from the IAB (Interactive Advertising Bureau) concluded that consumers who view advertising across channels improve their purchase intent by 90%. Seeing ads across the spectrum improves recall and brand familiarity.
Another advantage of cross-channel advertising is the repurposing of content. What plays on broadcast TV is also usable on OTT, CTV, social media and display.
Traditional Media Ad Revenue May Slip, But Your Revenue Doesn’t Have To
Traditional media ad revenue feels like a roller coaster. It’s often more volatile than digital, which appears to still be in growth mode. That’s why it’s critical to offer all tactics to meet your revenue goals and advertiser needs.
If you haven’t fully adopted third-party digital, it’s a good time to see the opportunities ahead. You can do so by using our new ad revenue forecasting calculator.