Marketers to Adjust Ad Budgets as Traditional TV Audience Shrinks

Nobody is saying that consumers have stopped watching TV. The format continues to draw the largest share of consumer media time. However, the Nielsen Company has uncovered a decrease in the number of U.S. TV households and marketers should consider what this means with respect to advertising.

Nielsen regularly tracks the number of TV households in this country. In the firm’s 2012 Advance/​Preliminary TV Household Universe Estimate (UE), analysts expect to see a drop from previous levels. Two numbers are significant here. First, the UE is expected to shrink from the 115.9 million in 2011 to 114.7 million in 2012. Second, the penetration rate for TV will also fall, from 98.9% to 96.7%. The last time these numbers dropped was in 1992.

Analysts point to several reasons for this trend:

  • Digital Transition: When the industry officially moved from analog to digital transmission, some households stopped watching TV and they have not returned.
  • Economics: More consumers are deciding that TV is a form of entertainment they can no longer afford. Nielsen analysts believe this problem is more prevalent in rural markets and in lower-​income households.
  • Multiple Platforms:  Consumers now have the option to view video programming across a number of platforms, including computers and mobile phones. Analysts noted that younger, urban consumers are skipping the paid TV subscriptions that have been a mainstay of U.S. adult life for decades. This is the same group of consumers who also cut the phone cord.

If any one of these factors represents a permanent trend, it could have implications for marketers who have been accustomed to reaching consumers through traditional TV.

[Source: Nielsen Estimates Number of U.S. Television Homes to be 114.7 Million. Blog​.nielsen​.com]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.