2017 August Ad Market Sees Effects of Last Year’s Olympics, But CYTD Market Still up 2.4%

Standard Media Index (SMI), the advertising intelligence company bringing clarity to the ad industry, today unveiled updated advertising revenue figures for August 2017. The total advertising market was down -7% compared to August 2016, due to the extensive loss of dollars that the Rio Olympics added to the market last year, putting National TV -27% down. Even though Digital did play a strong role in the Olympics, it is not taking a hit this month with a solid gain of +12%. While Radio saw incredible growth in July 2017, the medium saw a -5% decline in August. Newspapers saw a decline of -5%, but it must be noted that this is the first time in many months the decline has only been in the single digits. Magazines and Out-Of-Home saw declines, with -12% and -4%, respectively.

With the Olympics dominating most of August’s numbers, we also looked at CYTD growth, to determine how much the influx of Olympics dollars in 2016, was influencing the whole year. The US market CYTD (Jan – Aug 2017) is still positive with +2.4% more ad dollars in the market, than the same period in 2016. That said, the growth is entirely due to Digital’s +11% CYTD growth, as every other medium saw CYTD declines – National TV is down -4%, Radio is down -5%, Out-of-Home is down -1%, Magazines are down -13% and Newspaper are down -18%.

DIGITAL KEEPS AD MARKET GOING
The beginning of 2017 told a story of digital saturation. It seemed the growth rate was beginning to flatten. And while we aren’t seeing 20-25% growth, the +11% CYTD, and +12% August 2017 growth, is keeping the ad market afloat. The increase is spearhead by Google, who saw +16% growth (not including subsidiaries like YouTube) and Facebook, which saw +45% growth in August alone. Pandora also saw strong growth in August with +37% more spend than the previous year. Snapchat, on the other hand, saw its first slight decline with a decrease in direct ad spend by -2%. All the numbers above reflect direct ad spend made by our agency partners.

THE OLYMPIC EFFECT ON NATIONAL TV
In August 2017, Broadcast TV saw a year-over-year loss of -54%, while Cable only lost -1%. While NBC’s cable properties had plenty of Olympics coverage, when you look at the breakdown of ad spend, 92% of all Olympic spend went to Broadcast, with only 8% going to Cable.

“The Olympics in August 2016 make meaningful year on year comparisons tricky, but our data did show some insights that are worth focusing on. The overall market is up +2.4% on a year-to-date basis, with only a -4% year-to-date loss on TV, which shows that a lot of Olympics dollars had been redirected into the Games from existing budgets, said James Fennessy, CEO of Standard Media Index. “And, while the digital market has started to recover from the brand safety concerns earlier this year there is no doubt that growth has been impacted and publishers like YouTube are looking at more modest growth in the 10% region for the current quarter. We are also seeing the growth rates of cable news start to flatten out with the big three of CNN, MSNBC and Fox reporting a more modest jump of +6% on the same period last year, as audiences start to become comparable on a year on year basis”

DETAILS BY NETWORK
It should come as no surprise that NBC saw the biggest advertising loss with -82% less ad revenue compared to the year before. With the start of Preseason NFL games, and no Olympics to compete with, both CBS and FOX saw ad revenue increases to the tune of +17% and +14%, respectively. ABC was down just -1% year-over-year decline. Univision saw an increase in spend of +3%, while Telemundo declined at -7%, similarly due to no Olympic events.

“We saw a couple of standout entertainment programs on Broadcast deliver strongly for ABC and NBC in August,” Fennessy noted. “The finale of the Bachelorette saw an average spot jump +50% to $131,000 compared to 2016 and brought in almost 80% more revenue, and NBC should be delighted with the summer run of Saturday Night Live which delivered an average of $124,000 for each paid spot.”

In terms of Cable networks, ESPN saw a big +27% increase compared to August 2016. The increase can be attributed to Preseason NFL games, more of the U.S. Open taking place in August in 2017, than in 2016, higher unit rates around MLB games, and presumably less Olympic competition.

Other key networks include TBS with a +5% increase in revenue, HGTV which grew by +1.5%, Food Network with a +10% increase, and Discovery Channel with a +16% increase in spend.

TRUMP EFFECT ON NEWS SHOWS FIRST SIGNS OF LEVELING OUT
Cable news programming continues to see year-over-year growth, but, that rate of growth was much lower in August 2017, compared to August 2016, than in recent months with just +2% increase in spend, year-over-year. Looking at the big three networks (CNN, MSNBC, and FOX News), that number grows to +6%. While overall there is still growth, this is the first month we’ve seen any loss across these networks with FOX News earning -2.5% less revenue on all news programming. CNN saw a +8% increase, and MSNBC continues to see the highest percentage of growth with a +26% increase across its news programs. These numbers reflect only the programs considered news.

When you look at a CYTD comparison (Jan – Aug) of 2017 compared to the same time in 2016, these networks have received +19% more ad revenue. FOX News is at +15%, CNN at +18% and MSNBC at +41%. MSNBC started the year with the lowest average unit rates among the three networks, so it had a steeper hill to climb to reach its competitors.