Will President Donald Trump Take a Wrecking Ball to the TV Advertising Industry?

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When Donald Trump was sworn in as leader of the free world, feelings of heightened anxiety about the U.S. economy swept through the executive suites of corporate America in every industry, including TV advertising. While many business leaders feel uncertainty and even a sense of foreboding about Trump’s Presidency, TV advertising expert Scott Kowalchek offers sobering evidence that the sky is not falling.

President Donald Trump Impact on TV Advertising and the U.S. Economy  is Uncertain
If it's possible to feel optimism one moment and an anxiety attack the next that would describe the conflicted emotions TV advertisers and millions of Americans are feeling this week

Now that Donald Trump is the 45th president of the United States, TV advertising executives, like senior execs in other U.S. industries, are anxious. After a record-breaking year in ad revenues (with more than $4 billion generated by political ads), TV advertisers say every economic indicator points to 2017 as another profitable year; that is every economic indicator except one - President Donald Trump.

"Throughout his campaign and and even after he was elected Donald Trump has been a wrecking ball to political convention," said Scott Kowalchek, founder and CEO of California-based TV media buyer DirectAvenue. “He made industry leaders in automotive and aerospace nervous with a single Tweet. Now that he's the most powerful man in the world, Trump can hurt or help entire industries, including TV advertising, an industry he knows very well because of his long-running NBC show “The Apprentice."

While a review of Trump's 100 day plan suggests his impact on TV advertising will be negative and immediate, industry experts like Kowalchek insist the luster of a "Golden Age" of television, as the industry transitions from cable and broadcast to digital, cannot be dulled by any actions taken by the Trump Presidency.

The greatest legislative threat facing TV advertisers is the likely repeal of net neutrality, the principle that Internet service providers (ISPs) should give consumers access to all online content on an equal basis, without favoring some sources or blocking others. Trump appointed Jeff Eisenach and Mark Jamison, staunch opponents to net neutrality, as advisors to oversee the FCC. If they remove existing regulations in favor of a deregulated industry, content will most likely get more expensive and content creators like CBS, Netflix, and Facebook will have to pay higher fees for faster connections. The result would be an increase in operating costs that would most likely be passed on to consumers and advertisers.

While the gutting of net neutrality will hurt, advertiser losses will be a fraction of what could be lost with a sudden, downward turn in the economy. Many Americans worry that Trump’s temperament and lack of any political experience will doom the U.S. economy and have a similar effect on global markets. Yet despite a prevailing zeitgeist of fear and anxiety, U.S. markets have not been as gloomy. In fact, since his unlikely electoral victory in November, the U.S. stock market has risen steadily with no end in sight. Adding an exclamation point to the pro-Trump argument was an announcement earlier this week from the International Monetary Fund (IMF), which predicted that President Trump's plans for big spending increases and tax cuts in the United States are likely to spur a wave of economic growth.

But the IMF prediction came with a warning that raises a red flag over all positive economic forecasts linked to the Trump Presidency. Should Trump's unpredictable and occasionally unhinged tweeting storms prompt the first steps of a trade war with China, all positive economic predictions will fall as quickly as trading on Wall Street.

While the IMF warning is focused on China, Trump's Twitter insults have been directed at Germany, Mexico, and an assortment of world leaders (not including Russia’s Vladimir Putin). The ramifications of these attacks, should they continue now that Trump is President, are impossible to predict with any degree of certainty.

Kowalchek's advice to advertisers - trust the markets and economists, not your gut. You may dislike President Trump’s crass, confrontational and insensitive mannerisms, but you should like the ongoing Bull Run at the U.S. stock market, with Wall Street now valued at a record $26 billion. Most economists have equally bullish prediction about the U.S. economy and most attribute their lofty expectations directly to President Donald Trump.

In fact, beside his plan to repeal Net Neutrality, there is no other evidence that Trump will hurt the TV advertising industry. In fact, Kowalchek points out that a Google search for 2017 economic predictions will turn up more evidence and expert opinions that President Trump is far more likely to have a positive impact on the U.S. economy.

"If it's possible to feel optimism one moment and an anxiety attack the next that would describe the conflicted emotions TV advertisers and millions of Americans are feeling this week," said Kowalchek, adding that all advertisers can do is keep their day parts running, remain enthusiastic about the industry and the economy, and hope that President Donald Trump occasionally forgets the password to his Twitter account.

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Scott Kowalchek
DirectAvenue
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