Ad revenue should stabilize for media companies in 2025 | Global News Avenue

The advertising market will see positive momentum heading into 2025, especially for media companies with rights to sports events and popular live programming.

Live events such as sports and award shows dominated conversations with media executives as they looked ahead to the advertising market in the year ahead. They said the end of uncertainty surrounding the election also helped improve the outlook.

Even as consumers flee the traditional TV bundle and more ad dollars go to streaming, executives stressed that traditional TV remains important in discussions with advertisers, especially when it comes to sports.

Overall, executives said they expect the market to remain stable and hope to move beyond a slowdown in ad spending in recent years.

“Normalization is the right word for the ad market,” said Mark Marshall, chairman of global advertising and partnerships at NBCUniversal. “With the election now certain, many companies are feeling the uncertainty has gone away.”

He added that the company saw more so-called spread marketing budgets in the fourth quarter, which is what the industry calls buying and selling ads closer to air dates versus buying ads farther away.

“Our first quarter looks very strong. I think the fourth quarter in any election year is challenging for anyone because a lot of marketers end up sitting on their hands because of crowded broadcast and digital channels,” Sports Chief Executive Dan Porter said media companies are working overtime. “I think that’s true for us and that’s true for everybody.”

However, despite post-election ad revenue increases and stable forecasts, Teads global chief marketing officer Natalie Bastian said she expects many of the same trends.

Bastian noted that 2024 includes key moments such as the Summer Olympics and the presidential election, which bolster TV ad revenue. However, she expects the same budget to continue into the new year.

“The message we’re hearing from some of our closest partners is that … media budgets are not growing, so (advertisers) have more choice in where they spend their money,” Bastian said. That leaves sports and live Programming is even more important to media companies.

Overall, global advertising revenue is expected to exceed $1 trillion for the first time this year, excluding American political advertisingWill grow 7.7% to $1.1 trillion by 2025, according to a report recent reports From GroupM, the media investment group under WPP. Advertising on digital platforms – including retail media as a segment – ​​is what is driving this growth.

Television is considered the “most effective advertising format” and total global advertising revenue is expected to grow by nearly 2% by 2025, reaching $169.1 billion. By comparison, GroupM said ad revenue from “pure digital media” is expected to grow 10% to $813.3 billion in 2025, which excludes “digital extensions of traditional media” such as streaming but includes YouTube and Platforms like TikTok. .

Sports continue to attract large audiences and advertisers, prompting media companies to pay huge fees For the right to play.

According to advertising data company EDO, ads during live sporting events receive 24% higher engagement than other programming.

“Live event coverage will continue to be a cornerstone of media engagement, and streaming services must step up their efforts,” said Tim Hurd, vice president of media at Goodway Group. “As more and more streaming platforms get involved in sportsthe challenge will be to keep audiences engaged, not just by delivering content, but through personalized, non-disruptive ad units that enhance the overall experience. “

ComcastNBCUniversal said summer olympics Advertising revenue in Paris reached a record $1.2 billion. There seems to be got something in returnthe company reported a combined audience of more than 30 million viewers across NBC television and streaming platforms.

Fox Corporation Executives say the company has sold out of its Super Bowl ads in February. It is said Each costs about $7 million. super bowl 2024 estimated 123.7 million viewers.

and disney Advertisements for its Christmas Day NBA game sold out two weeks before airing. The company added that ad revenue throughout the NBA season was “significantly higher” than last year and that it was “already seeing early changes” in the playoffs across dispersed markets.

Audience numbers for women’s sports also increased last year, especially driven by the WNBA, which means more opportunities for advertisers.

“Caitlin Clark is a huge catalyst, but she goes beyond her capabilities,” said Josh Mattison, executive vice president of digital revenue pricing, planning and operations at Disney Advertising. range of capabilities. ” “It’s been a transformational year as far as audiences are concerned. ”

There was a wave of excitement in the WNBA auditorium Record According to EDO, by 2024, consumers will be 16% more likely to interact with ads in these games than last year. But while advertisers will spend $8.5 billion on sports TV advertising in 2024, women’s sports account for just 3% of that figure, leaving plenty of room for growth next year, according to EDO.

The growing popularity of women’s sports and its importance to media companies was evident this month: Netflix Acquired U.S. broadcast rights to the 2027 and 2031 FIFA Women’s World Cup. The streaming giant has been expanding its sports portfolio, as have its peers in traditional and digital media.

Although consumers are Cut the power cord While streaming services are snapping up sports rights, linear TV still has far more viewers than streaming.

“Linear TV is still declining in many markets, but not in all markets,” said Kate Scott-Dawkins, president of global business intelligence at GroupM. She noted that some international The market is growing. “There’s still a lot of opportunity when we’re talking about all-TV and hopefully there will be a renewed appreciation for its effectiveness as a medium (for advertisers).”

DirecTV Advertising chief ad sales officer Amy Leifer said the company expects programmatic ad spending, or automated digital ad buying, to continue to grow in streaming.

“Despite the shift to streaming, linear TV still has a significant advantage in ad impressions, generating six times the ad volume of streaming,” Leifer said.

Executives said they have been discussing with advertisers how to combine linear and streaming when paying for ads.

Leifer said DirecTV Advertising’s mantra is “TV is TV,” regardless of distribution method. “Our focus for 2025 is to unify digital and linear TV advertising by taking an integrated approach and developing converged TV solutions,” she added.

NBCUniversal’s Marshall and Disney’s Mattison both said advertisers have historically focused on linear “versus” streaming. This is no longer the case.

“The pitch[we made to advertisers]last year was that you really can’t compare one to the other. When it rolls out to a platform, it’s how you look at digital versus linear. That makes a huge difference, ” said Marshall, who noted that older viewers watch more linear TV, while younger generations tend to watch streaming TV.

Marshall said NBCUniversal’s Peacock “is not cannibalizing linear programming” because there is little overlap in content between the two distribution channels. “It’s really two very different audiences,” Marshall said.

Mattison noted that Disney’s broad sports portfolio and its various platforms across linear and streaming, including television networks such as ABC and ESPN, as well as streaming service ESPN+, which adds content to Disney+, have been a strength.

“The convergence (of streaming apps) is really good for consumers, which will lead to growth for advertisers,” he said. “We’re lucky that we’ve spent years building out streaming ad technology, and we’re able to maximize audience reach as well as targeting and performance.”

“Maybe a few years ago, it was linear versus streaming. I think now it’s linear versus streaming,” Mattison continued. “They planned it together. Both on the media side and on the advertiser side.”

Disclosure: Comcast owns CNBC parent NBCUniversal. NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. rights holder for all summer and winter Olympics through 2032.