Pay TV Reach Continues To Shrink

Giant media buyer GroupM forecasts that traditional pay TV will reach less than 50% of U.S. homes by 2025, reports nexttv.com.

Cord-cutting has been growing since 2012, when pay TV penetration was over 90%. Advertisers have been slower than consumers to shift away from traditional media because advertisers prefer to place their brand message next to higher-quality, professionally produced content.

But ad dollars will follow consumer eyeballs. “Currently we expect connected TV to grow double-digits over the next four years and make up nearly a third of all TV advertising revenue by 2027,” Group M said in its year-end global advertising forecast.

“You’re seeing that brands and advertisers need to expand their definition of professionally produced video in order to meet their reach goals,” GroupM global director, business intelligence Kate Scott-Dawkins said.

Historically, GroupM noted, large brands with big TV budgets account for most TV advertising. But in its report, the media buyer wonders what happens if it becomes impossible to reach a majority of the population with television-based campaigns?

GroupM notes that those conditional already exist in China, where linear TV reach is down to 46%.

“The solution for many marketers in the near term is mixed reach — activating and measuring campaigns across not only linear and connected TV but also online video and OOH video inventory,” the report said.