The New York Liberty celebrate after winning the 2024 WNBA Championship against the Minnesota Lynx during Game 5 of the 2024 WNBA Finals on October 20, 2024 at Barclays Center in Brooklyn, New York.
David Sherman | National Basketball Association | Getty Images
The advertising market has positive momentum into 2025 – especially for media companies with sports rights and live programming.
Sports and live events such as awards ceremonies dominated conversations with media executives discussing their expectations for the advertising market in the coming year. The end of election uncertainty has also helped improve the outlook, they said.
And despite consumers fleeing traditional TV bundles, with more advertising dollars moving to streaming, executives emphasized that traditional TV is still important in conversations with advertisers, especially when it comes to sports.
Overall, executives said they expect stability in the market and hope to overcome the slowdown in ad spending in recent years.
“Normalization is the right way to put it as it relates to the advertising market,” said Mark Marshall, president of Global Advertising and Partnerships at NBCUniversal. “Now that the elections have been settled, many companies feel that the uncertainty about them has disappeared.”
He added that the company has seen more so-called dispersed market budgets coming in in the fourth quarter, what the industry calls buying and selling ads closer to their air date than ads bought later.
“Our first quarter looks very strong. I think Q4 is a challenge every election year for everyone because a lot of marketers end up sitting on their hands because the radio and digital waves are crowded,” said Dan Porter, CEO of sports. media company Overtime. “I think that applies to us, and it applies to everyone.”
But despite the post-election boost in ad revenue and predicted stability, Natalie Bastian, Global Chief Marketing Officer at Teads, said she expects many of the same trends.
Bastian noted that 2024 had important moments such as the Summer Olympics and the presidential elections, which increased TV advertising revenues. However, she expects the same budgets to be carried over into the new year.
“What we've heard generally from some of our closest partners… media budgets are not growing, and so there's just more selection in where [advertisers are] spend their money,” said Bastian. This makes sports and live programming all the more important for media companies.
Overall, the global advertising industry is expected to surpass $1 trillion in revenue for the first time this year, excluding U.S. political ads, and grow 7.7% to $1.1 trillion by 2025, according to a recent report from GroupM, WPP's media investment. group. Advertising on digital platforms – which includes retail media as a segment – is the driving force behind this increase.
TV, considered “the most effective form of advertising,” is expected to grow nearly 2% to $169.1 billion in total global advertising revenue by 2025. By comparison, advertising revenue for “pure-play digital,” which excludes “the digital extensions of traditional media” like streaming but includes platforms like YouTube and TikTok, is expected to grow 10% to 813 by 2025, $3 billion, according to GroupM. .
Championship in sports
Los Angeles Mayor Karen Bass waves the Olympic flag as International Olympic Committee President Thomas Bach applauds during the closing ceremony of the Paris 2024 Olympic Games at the Stade de France on August 11, 2024 in Paris, France.
Carl Recine | Getty Images Sports | Getty Images
Sports continues to attract large audiences and advertisers, causing media companies to pay hefty sums for the rights to games.
According to EDO, an advertising data company, commercials during live sports generated 24% more engagement than other programs.
“Live event coverage will remain a cornerstone of media engagement, and streaming services need to step up their game,” said Tim Hurd, vice president of media at Goodway Group. “As more streaming platforms delve into sports, the challenge will be to keep viewers engaged, not just by delivering content, but by enhancing the overall experience with personalized, non-disruptive ad units.”
ComcastNBCUniversal said the Summer Olympics in Paris generated a record $1.2 billion in advertising revenue. It seemed to pay off, with the company reporting a total audience reach of more than 30 million people across NBC's TV and streaming platforms.
Fox Corp. Executives have said the company has already sold out its Super Bowl ads for next February, which reportedly cost about $7 million each. The 2024 Super Bowl had an estimated 123.7 million viewers.
And Disney said the ads for the NBA Christmas Day games sold out two weeks before they aired. The company added that it is “significantly up” in ad revenue for the full NBA season compared to last year, and that it is “already seeing early movement” for the postseason in the scatter market.
Audiences for women's sports, driven primarily by the WNBA, have also increased over the past year, meaning more opportunities for advertisers.
“This is beyond Caitlin Clark, even though she is a huge catalyst,” said Josh Mattison, Executive Vice President of Digital Revenue Pricing, Planning and Operations at Disney Advertising. “This has been a year of transformation in terms of audiences.”
Audiences for the WNBA reached a record high in 2024, and according to EDO, consumers were 16% more likely to see ads during these games than last year. But while advertisers spent $8.5 billion on sports TV ads in 2024, women's sports made up just 3% of that number, according to EDO, leaving plenty of room for growth next year.
The growing popularity of women's sports and its importance to media companies was clearly visible this month Netflix secured the U.S. rights to the FIFA Women's World Cup in 2027 and 2031. The streaming giant has expanded its sports portfolio, much like its peers in the traditional and digital media space.
Linear importance
A view of an ESPN cameraman during the game between the Jacksonville Jaguars and the Cincinnati Bengals on December 4, 2023 at EverBank Stadium in Jacksonville, Florida.
David Rosenblum | Icon Sportswire | Getty Images
While consumers are cutting the cord and streaming services are now demanding sports rights, linear TV's audience is still significantly larger than streaming.
“There is still a decline in linear TV in many markets, but not all,” says GroupM Global President of Business Intelligence Kate Scott-Dawkins, noting that there are international markets seeing growth. “When we talk about total TV, there's still a lot of opportunity and hopefully a renewed appreciation for how effective that can be as a medium [for advertisers].”
Amy Leifer, Chief Ad Sales Officer of DirecTV Advertising, said the company predicts continued growth in programmatic ad spending, or automated digital ad buying, in streaming.
“Despite the shift to streaming, linear TV still has a significant advantage in terms of ad impressions, which generate six times more than streaming,” Leifer said.
Executives said they have talked to advertisers about how they can consider linear and streaming together when paying out ad dollars.
Leifer said DirecTV Advertising's mantra is “TV is TV,” regardless of the distribution method. “Our focus for 2025 is to unify digital and linear television advertising by taking a comprehensive approach and developing convergent TV solutions,” she added.
Both NBCUniversal's Marshall and Disney's Mattison said advertisers used to focus on linear “versus” streaming. That is no longer the case.
“The field [we made to advertisers] Last year you really can't look at one thing or another. When it is rolled out on one platform, the question is how you view digital and linear together. That has made a huge difference,” Marshall said, noting that older audiences have a greater presence on linear TV, while younger generations have gravitated toward streaming.
Marshall said NBCUniversal's Peacock “does not cannibalize linearly” because there is little overlap between content on both distribution channels. “They're actually two different, distinct audiences,” Marshall said.
Mattison noted that Disney's extensive sports portfolio and its various linear and streaming platforms, with TV networks such as ABC and ESPN, and streaming service ESPN+, which adds content to Disney+, have been an advantage.
'The convergence [of the streaming apps] is really good for consumers, leading to growth for advertisers,” he said. “We're fortunate that we've spent years building our streaming ad technology, and we've improved audience reach, targeting and can maximize performance.”
“Maybe a few years ago it was linear versus streaming. I think now it's linear AND streaming,” Mattison continued. “They are more or less planned together. That applies to both the media side and the advertisers side.”
Disclosure: Comcast owns CNBC parent company NBCUniversal. NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder for all summer and winter games through 2032.