US TV ad revenues declined by 9.3% in 2020, marking the largest dip in TV ad revenues since the Great Recession of 2009 (-10%). However, US TV advertising performed strongly in the last quarter of the year, softening the blow for broadcasters who had seen their revenues decline by as much as 31% in Q2 compared with the same period in 2019. On the back of a surge in political advertising spending around the Presidential elections, and the return of live sports on television, US TV ad revenues reached $17bn in Q4 2020, +3% compared with the last three months of 2019 (and the first year-on-year growth of the past 11 quarters).

The prospects of a relatively rapid roll-out of COVID-19 vaccines, combined with the US Government’s expansionary economic policy, bode well for the TV advertising market in 2021, in a year which could see the Summer Olympic games take place, after having been postponed in 2020. Against this background, Ampere currently expects US TV advertising revenues to grow by 11% in 2021, reaching $59.3bn.

While US broadcasters will certainly welcome the strong Q4 performance of TV advertising, the effects of this recovery are unlikely to be long-lasting. In the last election cycle television advertising was an important aspect of political campaigning, but it is hard to predict whether that is a phenomenon that will repeat itself in the next elections, as viewing continues to migrate online. Furthermore, as a flurry of ad-supported online video services are launched by all major studios (e.g. Peacock by NBC Universal, or Paramount+ by ViacomCBS), broadcasters might find their subsidiaries compete with each other for ad dollars. For these reasons, we expect TV advertising revenue to revert to a generally long-term declining path following 2021.