TV advertising has hit a wall thanks to streaming options like Netflix

Do people even know what this is anymore?
Do people even know what this is anymore?
Image: AP Photo/Matt Rourke
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The advertising industry has long predicted that TV ad revenues would collapse under the weight of cord-cutting and competition from online platforms like Google and Facebook. It looks like that’s finally happened.

Spending on TV ads fell for the first time in 2017, and will slip another 0.5% this year to $69.87 billion as more Americans ditch standard TV packages, eMarketer estimates. The firm said that TV ad spending would likely rise again in 2020, when the next US presidential race and Summer Olympics take place. But it’s otherwise expected to continue its downward spiral.

Advertisers are spending less on traditional TV because viewership is falling. Even marquee cable TV shows like The Walking Dead are having trouble holding onto viewers. On Tuesday night, the two-episode return of Roseanne attracted an audience that’s almost unheard today outside of major sporting and other live events—18.1 million total viewers. Ten years ago, a primetime audience of that size was considered solid, but standard.

New streaming-video services for programming from sports to family shows are popping up every day. With more TV alternatives than ever, more Americans are turning to online options that bypass traditional distribution, such as HBO Now, Hulu, Netflix, or YouTube.

Ad-supported online video platforms like Hulu and Roku are expected to rake in more US advertising revenue this year and pull dollars away from TV. But their share of overall US ad spending is pennies compared to online giants like Facebook and Google, which will reap a combined 57% of digital ad spending this year. Google’s YouTube alone will receive about 4% of digital spending.

TV’s command over the US advertising revenues has given way to digital, which is expected to bring in nearly half of all ad revenue this year.