Linear TV inflation accelerates while advanced TV costs are stable
The cost of linear TV advertising is expected to accelerate rapidly this year, while advanced TV inflation will remain subdued, according to the latest data for the United States from the World Federation of Advertisers.
Linear TV advertising costs increased 9.0% in the last three months of 2020, while advanced TV costs only increased 1.0% during the same period.
Linear television inflation is expected to accelerate throughout this year, with 16.4% growth expected at the end of 2021. However, advanced television is expected to see its costs increase slightly throughout 2021 beforehand. to increase by 5.3% in the fourth quarter of 2021.
The advertising costs of connected television (streaming), which is part of advanced television, declined in 2020 and 2021 despite growing demand from advertisers. Costs fell 3.0% in the fourth quarter of 2020 and are expected to increase 2.9% by the end of 2021.
Addressable television (linear television), however, has seen inflation throughout 2020 and 2021. Costs increased 2.5% in the fourth quarter of 2020 and are expected to increase by 3.4% in the fourth quarter of 2021.
MRA Data Forecast Linear TV ad spend in the United States has grown 6.1% this year, the fastest growing in nearly a decade and even as audiences are shrinking. However, this still places total spending below the pre-pandemic level. Media and publishing advertisers will invest the most in television in 2021, at $ 9.2 billion, while transportation and tourism will see the fastest growth.
Additional research shows that 60% of advertising budgets for connected TV come from linear budgets, which favors the growth of digital TV at the expense of offline TV. However, the combination of the two formats is popular, with advanced television often being used for incremental reach.
WARC Data customers can access CPM data by medium and audience in 39 markets, including the United States, here.