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Spending by Streaming TV Expected to Give Ad Growth a Long-Term Boost

“We expect the new and existing streaming video services to account for multiple billions of dollars in domestic advertising spending by the time these services are all operating at scale,” said Brian Wieser, global president of business intelligence at GroupM, in the report.

Walt Disney Co. ran national television commercials for Disney+ more than 5,000 times since September, according to TV ad-measurement firm iSpot.tv Inc., and Apple Inc. ran national spots for Apple TV+ more than 4,200 times.

Created with Highcharts 6.1.1Fluctuating Ad GrowthProjected percentage growth in U.S. adspending, including political ads, directoriesand direct mailSource: GroupM U.S. Media Forecast

Created with Highcharts 6.1.1201920202021202220232024-202468

That is far fewer ads than a top TV spender like T-Mobile US Inc. but well more than many other major marketers, according to iSpot.tv.

Total ad spending this year should rise 3.4% to $245.5 billion, GroupM said in its forecast, revising an earlier estimate of 1.5% growth.

Excluding political spending, growth is expected to reach 6.2% this year, according to the forecast.

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Total U.S. outlays are expected to rise 7.1% to $262.9 billion next year, propelled by political advertising amid the 2020 presidential campaign, GroupM said, roughly even with its earlier projection.

Excluding political ads next year, U.S. ad spending should rise 4%, according to GroupM, leaving an earlier projection unchanged. (All the figures include spending on directories and direct mail.)

Over the horizon

GroupM looked further out than usual in its latest forecasts, adding estimates through 2024. It previously only made projections for one year out.

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By 2024, total U.S. ad spending including political ads is expected to reach $296.6 billion, GroupM said. That will mark a 6.3% increase from 2023, which is expected to post a gain in spending of just 0.2%.

“Extreme variation in growth rates has become the norm in the U.S. advertising industry, as political advertising itself is causing mid-single-digit swings of growth and decline from year to year,” Mr. Wieser wrote.

New advertisers and falling TV ratings will give networks a stronger hand at the negotiating table with ad buyers. “We see other factors affecting supply—ad-supported streaming services, increased activity from gaming and telco sectors, to name a few,” said Meredith Verdone, chief marketing officer at Bank of America Corp. “So although linear supply continues to erode, demand isn’t following suit, driving up inflation in a sellers’ market that is only likely to become stronger.”

Write to Nat Ives at nat.ives@wsj.com


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