Standard Media Index (SMI), the company providing the only complete and clear picture on real advertising cost and spend, today unveiled updated figures for September and Q3 2016. SMI total market closed the quarter at +1% in September with an overall Q3 growth of +10% year-over-year. Spend for the quarter was the highest volume of spend recorded for a Q3 since SMI started tracking spend in 2009.
Despite a strong summer showing, the start of the 2016-2017 television season has gotten off to a rocky start with -5.8% loss YoY. Broadcast spend saw a steep decline of -13.2% YoY due to the virtual drying up of spend from FanDuel and DraftKings. In September 2016, the two companies have spent nearly $100m less than in September 2015 across all broadcast and cable. Cable networks in September delivered a flat +0.7% increase in gross spend.
Primetime revenue fell -16% on a YoY basis. The average unit cost across all 4 major networks (ABC, NBC, CBS and FOX) during the primetime daypart, excluding sports, was $86,000, down -7.6% from $93,300 in 2015. Furthermore, it appears advertisers held back in upfront spend for the month, likely having committed a great deal of their dollars to the Olympics. Upfront was down -25% while scatter spend was up +32% YoY.
Programming winners by night:
The average 30 second spot across all networks showing NFL games in September was $509,193, that’s an +8% increase over the same period last year and +10% from 2014.
“Our new cost level data clearly shows that while ratings on football have been under pressure early in the season, average unit costs continue to increase. This demonstrates that live sport and the huge audiences it attracts are an outstanding drawcard for major brands. On the flip side, primetime and late night programming doesn’t provide the same pull. Poor ratings are directly linked to falls in revenue and average unit cost declines,” said James Fennessy, CEO of SMI. “While some of September’s falls can be attributed to a post Olympics hangover, evidence shows the biggest contributor to broadcast’s significant fall was driven by the fantasy leagues spend almost completely drying up under the numerous legal actions they face. Cable’s gains are directly related to the terrific results delivered by the news networks, which we fully expect to continue through the November election cycle.”
Q3 2016 (July-Sept) saw a +9.3% increase in television ad spend across the board, compared to the same time last year. Broadcast saw an increase of +18.1% while cable increased by +3.7% compared to Q3 2015. The increase in broadcast spend for the quarter is due to the 2016 Rio Olympics. Similarly, because of the Olympics, NBC television saw a +117% increase in ad revenue earned for the quarter.
During the month of September, digital platforms received +14% more ad revenue than the same time period last year. Advertising on social sites (+44%), video sites (+30%) and internet radio sites (+21%), delivered the largest YoY gains in the sector for September.
Magazines (-14%), Newspapers (-26%) and Radio (-3%) all lost revenue compared to September 2015, while OOH saw a +8% increase.
For Q3, digital platforms received +15% more ad revenue than the same time period last year. Advertising on social sites (+50%), video sites (+30%) and TV Network- Digital (+24), delivered the largest YoY gains in the sector for Q3 2016.
A few categories who decreased spend on digital for the quarter were Retail-Department Stores (-6%), QSR (-9%), and Auto Aftermarket Parts and Services (-19%). Nearly every other industry increased spend for Q3 2016, including Real Estate & Development (+88%), Food. Produce and Dairy (+56%), Alcoholic Beverages (+41%), and Pharma – OTC (+55%).
Compared to Q3 2015, in Q3 2016 Google saw +13% growth in ad spend, Facebook saw +79% growth, Pandora saw +8% growth, and Spotify saw +49% growth. Meanwhile, Instagram loss -49% of spend YoY and Twitter fell by -11%.
Magazines (-11%), Newspapers (-17%) and Radio (-4%) all lost revenue compared to Q3 2015, while OOH saw a +5% increase for the quarter.
SMI captures 80% of total U.S. agency spend exclusively from the booking systems of five of the six global media holding groups, as well as leading independents. It reports monthly on actual spend data and is the clearest picture of the flow of dollars across the sector.