LONDON, UK — As we head into 2024, for many, flat is the new up, as several forecasts paint a picture of ad growth stagnation.

For Justin Lebbon, Director, Adwanted Events, TV is attempting to make a transition from linear to digital.

In this interview, Lebbon wrapped-up the key The Future Of Television Advertising conference he organized every year.

Speaking to me as the two-day conference drew to a close, and after hearing dozens of industry executives’ views, he sees a channel having to respond to the growing influence of tech platforms.

A Hybrid Period of Challenges and Change

“There’s no two ways about it, viewership is declining and broadcasters around the world are trying to compensate for that” with digital services and IPTV offerings that provide greater data and targeting capabilities, Lebbon says.

“In this sort of hybrid world, it’s going to be a really challenging time for all broadcasters,” he adds. This transition period will be particularly hard on broadcasting brands in smaller and mid-size markets, many of which may not survive the next five to seven years.

The trouble is, the current transition period requires investment and time which many do not have, Lebbon says.

Ad Spending Shifts and the Battle for Effectiveness

GroupM forecasts TV’s share of the global ad market will decline to 17.9% in 2024. TV ad growth is expected to be just 1.1% over the next five years. That is despite growth of 9.5% from connected TV advertising.

To blame? Small and medium businesses buying ads on Google and Meta, while larger brands continue to appreciate TV but look for increased evidence of its performance.

Lebbon believes TV is losing the subjective battle to prove ad effectiveness, with ad spend shifting channels.

“Incremental spend is going to the platforms,” he says.

Indeed, Analyst Brian Wieser thinks US national TV ad sales in Q3 2023 were down 3.2%, even including streaming platforms, saying:

“Connected TV and digital forms of the medium are not sources of meaningful incremental growth. … The overall medium faces long-term growth challenges primarily because the large advertisers who dominate TV need to shift spending away from TV to fund additional digital spending and this shift is not offset by growth in spending from newer advertisers.”

Lebbon thinks this struggle will likely trigger consolidation, regulatory leniency in many markets and the disappearance of some TV brands.

What TV Can Do

When asked about the Connected TV (CTV) migration trajectory, Lebbon maintains a realistic perspective. “Will overall ad spend end up going up? Will it come to television? It’s difficult,” he says. With declining viewership and demographic shifts, fewer impressions are available for sale, affecting the appeal of TV to advertisers.

However, Lebbon is optimistic about the potential for improvement. “I think TV will get much, much better at selling itself,” he says. “They’ll digitize the operation, they will move more to outcomes, and I think they’ll talk in a language that will appeal to these brands and organizations who are putting their money into performance.”

In the next 12 months, Lebbon anticipates more prominent consolidation conversations and tighter collaborations among media sales houses. “Advertisers want audience. They want scale. They want ease of transaction,” he says, emphasizing the need for sales houses to work together in the face of fragmentation.

“You’re going to see a lot more higher level collaboration, and you’re going to see the growth of these streaming services,” predicts Lebbon.

You’re watching Beet.TV coverage of The Future of TV Advertising Global 2023, presented by Index Exchange. For more videos from this series, please visit this page.