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GroupM forecasts 2022 may be the last year of growth for linear TV spend

Linear TV may face its last year of growth in the Australian market as connected TV becomes the key driver of TV growth, GroupM has reported in its annual global end-of-year forecast, ‘This Year Next Year’.

Locally, GroupM revised year-on-year growth for total TV in Australia from 4.8% down to 3.7% for 2022, driven primarily by the growth of connected TV, with the forecast for 2023 putting total TV at a small overall decline of 0.2%.

The WPP media arm sees 2023 as a “watershed year for TV and streaming”, forecasting that from 2023 onwards linear TV will be in decline each year, with the diversification of TV meaning that any growth will now come exclusively from connected TV.

Despite the forecast, networks remain steadfast that linear TV will not stay in decline, also pointing to the shift towards total TV as the most important metric for advertisers.

“Total TV is the future of television”, Nine’s chief sales officer Michael Stephenson told Mumbrella. He added that total TV is part of a “7 billion” digital video market in which “total television is by far the dominant player because it is the most effective way to advertise”.

“That digital video market is in long term growth, so as a result of that total TV will also be long term growth,” Stephenson added. “It’s never been stronger, never been more effective and it’s never been more interesting for advertisers.”

Seven chief revenue officer, Kurt Burnette, said: “When looking to the future, smart analysis will look to the past. History will show linear TV declined for multiple years in the past, to then return to growth. It will do that again. The big difference is that in the coming years, it’s total TV that matters. Total TV across linear, metro, regional and digital will be in solid growth when combined, reflecting the audience viewing behaviour. And in combination, total TV will still be the fastest and most effective way for advertisers to target audiences and reach them at scale.”

Paramount ANZ chief sales officer Rod Prosser added: “Paramount ANZ is a leading media and entertainment company that includes linear TV, FAST channels, on demand, STV and SVOD which are enhanced with market-leading, innovative ad products. We also have a range of additional business opportunities across consumer products, events and experiences that deepen audience engagement. So we’re very well placed to reach exclusive and large audiences and capture the associated advertising revenue now and in the future.”

The locally forecasted fall of traditional broadcast was part of a larger global trend in the decline of linear TV spend, due in part to the “diminished” quality of linear TV content and reduced audience reach.

Despite this, the WPP media group forecasted a continued global growth of 1-3% for television over the next five years as the growth of connected TV continues to narrowly offset the decline of linear.

The changing makeup of overall TV revenue is evidence of a more integrated approach to TV advertising, as suggested by Burnette and Stephenson, with Group M global director of business intelligence, Kate Scott-Dawson echoing that brands are increasingly “planning and budgeting for TV holistically” and are thus “less concerned where the reach is coming from, whether it’s on linear TV or connected TV”.

Overall, the report placed 2022 global advertising growth at 6.5% excluding political advertising, with a forecast of 5.9% for 2023. The Australian market was forecasted to hit 10.9% growth in 2022, reaching $14.5 billion, while 2023 will see a significantly lower growth of 3.4%.

The report continued that the revenue growth of digital pure-play platforms during the pandemic would continue in 2022, at a slower 14.8% rise, with global media platforms and retail media also key contributors to the market, forecasted to see ongoing single-digit growth over the near-term.

Audio is pitted at 6% growth for 2022, closing in on pre-COVID revenue, with the expansion of podcasting and streaming continuing to drive growth in coming years. In 2023, audio revenue is expected to grow by 1%. Mumbrella

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