Could Google’s Woes Spare TV A 7% Revenue Nosedive?

Could Google’s Woes Spare TV A 7% Revenue Nosedive?

by Sean Hargrave, Staff Writer, March 27, 2017

We are now a quarter of the way through the first year in which Publicis Groupe’s Zenith has predicted that more will be spent on digital advertising globally than on traditional channels. It is little wonder, then, that this coincides with the first predicted drop in UK tv ad spending in five years.

Could Google's Woes Spare TV A 7% Revenue Nosedive?

TV had proved resilient after the financial crash, and from 2012 — the year of the London Olympics — and has continually posted growth each year.

But this is the year, Zenith forecasts, that the period of growth comes to an end — just after ITV posted its first decline in television ad revenue since 2009. Across the UK television market, Zenith is forecasting a 2% drop in spend this year after a modest 1.3% rise last year. The drop will be most severe in first-quarter 2017, with a 7% reduction in budgets expected.

The researchers are explaining this as not just a move to digital marketing, although that clearly is the ongoing macro issue. Looking at the micro issues, however, shows that television has simply heated up over the past five years. The channel has had a great run. The London Olympic year was clearly a huge one for brands to get messages out there to a mass audience, and then we have had several Euro and World Cup Championships, plus a Rugby World Cup right here in the UK.

But take a look at this year, and it’s not quite as exciting. There is no major summer tournament to get advertisers excited, we have to wait for Russia 2018 for the next World Cup ,and when the next Rugby World Cup takes place in 2019, it will be in Japan, which is far from ideal for mass tv audiences.

So we have been riding the crest of a wave — and now it is time for that wave to flatten out, it seems. There is one potential saving grace for television — the excrement storm that is YouTube. Right now Google is fighting hard to save its brand safety reputation and is obviously under a massive boycott that reads like a who’s who of advertisers.

Could it just be that this downward forecast from Zenith is not visited upon tv stations because of the risk that brands now associate with throwing budget at YouTube and other Internet giants that have come in for a roasting over hosting extremist videos and allowing advertisers to fund them?

I’m not so sure that we will see a reversal and go back to major growth for television, but surely the huge question mark over the main alternative must weigh heavily on advertisers’ minds.

If YouTube is coming off the plan for a lot of brands and agencies, that must be good news for television.

At least the massive drop of 7% in Q1 is hard to envisage, given the problems that are plaguing tv’s main digital rival at the moment.

MediaPost.com: Search Marketing Daily

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