America’s TV ad spend this year will match 2016’s $72bn… even though there’s no Olympics

Lucy Handley, special to CNBC
Hans Laubel | Getty Images

TV advertising spend in the U.S. in 2017 will match 2016 figures, according to a report by Deloitte Global, which estimates about $72 billion was spent by brands on TV last year - in spite of the fact there are no Olympic Games or presidential elections.

However, a combination of high levels of TV watching, especially among older age-groups, limited ad-skipping and a moderately low user base for video streaming is contributing to a relatively buoyant TV ad market.

Americans' love of TV is set to continue, says the report, as those in the U.S. watch an average of five hours a day. And they are still watching live TV, rather than catch-up or time-shifted services, with only half an hour watched through Digital Video Recorders or other devices which allow ads to be skipped.

Hans Laubel | Getty Images

The time spent watching TV is even higher for the over-65 age group, who watched nearly seven hours a day in the first half of 2016, an increase of five minutes on 2015 figures. "The 65+ age-group is the fastest growing segment of the population," the report states. "This demographic evolution may cause daily average TV viewing by all Americans to rise in 2017 and 2018, and perhaps further ahead," it adds.

Digital video may be great for targeting niche markets, but TV remains superior for brand-building advertising, the report says. "A fifth of all TV users account for 83 percent of video streaming on smartphones, and 87 percent on PCs. By contrast, consumption of traditional TV is much more evenly balanced and less skewed, with the 20 percent of users who watch most TV accounting for 52 percent of all usage."

While spend on digital advertising in the U.S. is likely to overtake TV spend for the first time in 2017, certain sectors are likely to buoy TV ads such as consumer packaged goods and pharmaceuticals, according to Deloitte Global.

Marketers should use a blend of media, the report suggests. Advertisers "should consider which products are best advertised on TV and which on digital. In this 'omnichannel' world, they need to make all their different ad channels work together, rather than trying to pick a single winner-takes-all medium."

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