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With Rio Push, The TV Industry is Back on Top

September 27 th 2016

2016 has brought a lot of mixed emotions for the TV advertising industry. We saw signs of a revival as some started to question the effectiveness of digital advertising. We then saw a sharp downturn in spend over the summer months (especially July) and projections that digital spend was set to surpass that of TV for the first time ever by the end of the year.

Because of this, as we started digging into the SMI data for August, we weren’t sure what to expect. We knew The 2016 Rio Olympics would make an impact – but with such a tumultuous market, how much of an impact was a big question mark. What we saw was the best August ever recorded.

Let’s put this into perspective – $3.5 billion was spent on broadcast and cable ads throughout the calendar month of August 2016. That’s $1 billion more in total spend over August 2015, a 40 percent increase * Broadcast spend for the month increased by 106 percent YoY; cable increased more modestly by 8 percent for the month YoY, but trending well upward from recent months

Not only was August the strong overall month that the TV industry needed, but it was a boost to NBC as well. All of NBCUniversal’s cable and broadcast properties showing the Olympics saw a nearly 290 percent increase in year-over-year spend on the month.

In fact, NBC took 66 percent of the broadcast market share for the month compared to August 2015, where it only held 23 percent of the market. And, spend around the Olympics accounted for nearly one-third (30.7 percent) of all TV, cable, and broadcast, ad spend throughout August.

August also marked the largest total scatter spend documented since we started reporting on TV buying type with a 101 percent increase from Aug. 2015; scatter ads accounted for 33 percent of the total market. Upfront buying also saw an increase of 22 percent year-over-year, across all TV categories.

DIGITAL SEES CONTINUED GROWTH

While the headline from the August data is definitely the influence of the Rio Olympics on TV advertising, the digital market remains one to watch. The market has been steadily increasing YoY and August was no different. Across all digital properties, we saw a 16.4 percent increase in spend YoY in August, bringing the CYTD total growth to 15 percent and an increase in digital’s piece of the pie to 33.8 percent of the total market spend for the month.

Snapchat continues to gain momentum with a 683 percent increase in spend YoY in August. Similar to its TV counterparts, NBCUniversal’s digital properties also saw huge gains with a 131 percent increase YoY in August. Facebook, Spotify and YouTube also gained double digit momentum with 89, 61 and 47 percent growth YoY for the month. Meanwhile, even with Verizon’s official purchase of Yahoo imminent, the company only continues to see double-digit declines in ad revenue – 55 percent decrease YoY in August.

With August and the Olympics now behind us, September brings the end of the broadcast year but the beginning of so much more including the fall TV season, the NFL season, and Presidential debates. For us here at SMI, that means there’s a lot of new data that we get to dive into.

FULL LIST OF SMI AUGUST AD MARKET HIGHLIGHTS

  • Total ad spend increased by 24.8 percent in August 2016 year-over-year (YoY)
  • Total television – including national TV, Spot TV, Syndication and Local MSO/Cable – rose by 40 percent YoY in August to $3.5 billion, driven primarily by a 106 percent increase in Broadcast TV
  • Total TV spend is 7 percent greater in this broadcast year-to-date (Oct-August) compared to 2015.
  • NBC took 66 percent of the market share due to its Olympic coverage, a 290 percent increase YoY compared to the 23 percent it held in August 2015
  • Upfront accounted for 65 percent of spend across total television, while scatter accounted for 33 percent for August 2016.
  • Print continued its decline this month with newspapers seeing a 23.5 percent decrease and magazines seeing a 7.9 decrease in August 2016 spend compared to August 2015
  • Digital ad spend increased by 16.4 percent YoY for the month bringing the CYTD total growth to 15 percent. Digital now also represents 33.8 percent of the total market
  • Advertising on pure-play video and pure-play social sites saw the biggest saw the largest YoY growth with 41.5 and 53.1 percent change respectively
  • Yahoo has seen a 55.3 percent decrease on CYTD spend, one of the only digital properties to see any sort of decline
  • Ad Network/Ad Exchange saw a 23 percent YoY growth for CYTD 2016, with Pure Play-Social and Pure Play-Video growing at 53 percent 41 percent respectively
  • The best performing advertising categories for August 2016 in digital were Food, Produce & Dairy at +55 percent, Consumer Electronics at +47 percent and Pharmaceutical – Prescriptions at +36 percent
Jennifer Rose

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