eMarketer's just-released “Advertising Trends to Watch in 2024” report suggests, in not so many words, that radio could benefit from paying attention to trends in digital media and TV, not to mention the gradual acceptance of artificial intelligence in the ad business.
The report summarizes what's to come this way: “After years of unbridled growth and unprecedented spikes stemming from the pandemic, the U.S. digital ad market is settling into a period of more modest and predictable growth. But beneath those calm waters, there is turbulence in many parts of the ecosystem, including TV and connected TV (CTV) ad measurement, AI, and streaming.”
While eMarketer sees double-digit annual growth for digital ad spend continuing through 2027, that growth rate will decelerate. “This is a sign of a mature market that will top $270 billion this year and account for over three-quarters of all ad spending,” the report says, noting that the deceleration cycle began in 2019 and has been on a gradual downward trajectory since. “Barring other cataclysmic events like the Great Recession or the onset of the coronavirus pandemic, the likely scenario is a continued deceleration with less year-to-year variance.”
While radio grapples with AI at every end of the business, the ad world is set to undergo a transformation at its hands in the near future, says eMarketer, citing a study showing that seven in 10 marketers expect AI to have a serious impact within the next two years – excluding an additional 18% who says it's already making an impact.
“AI is imperfect and raises many logistical and ethical questions, but it will reshape virtually every facet of advertising,” the report says. “In 2024, marketers and agencies will lean further into AI for creative ideation, media planning, and more. As creative agencies and individual media buyers get more comfortable with using generative AI to boost creative output, this trend will change how creative agencies work and media buyers think.”
On the television side, eMarketer predicts that Nielsen, while gradually phasing out its current ad measurement ratings as more viewers shift from linear to connected TV, “will lose its iron grip on TV measurement. It's a new day in TV ad measurement, as evidenced by the many analytics firms that are rushing in to fill the void left by the ratings giant.” At the same time, though, its forecast emphasizes that “Nielsen will continue to be a key player in a multi-currency world. Given its long-dominant industry position and infrastructural advantages, Nielsen may very well thrive in a decentralized environment, especially among smaller networks that can't afford to support more than one currency.”
Changes in consumer TV viewing lead eMarketer to eulogize the cable bundle, saying “there’s no turning back the tide of cord-cutting. The traditional cable, satellite, and telco pay TV bundle continues to lose ground to streamers, and the trend is irreversible.” At the same time, it also notes that “as more people shift from linear to CTV, consumers will demand a more cohesive and affordable experience on digital channels, [which] will pressure streaming services and aggregators to offer digital bundles that could look uncannily like their traditional TV predecessors.”
As this happens, more viewers will turn to free ad-supported streaming media. By 2027, nearly one-third of the U.S. population will view content on services such as Roku, Tubi, Pluto TV, and Freevee – the first three of which are expected to see double-digit ad revenue growth next year, eMarketer says, adding that “one-third of streaming subscriptions will become ad-supported, as more people sign up for those tiers.”
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