Standard Media Index (SMI), the company bringing accuracy and transparency to advertising data, today unveiled updated figures for April 2017. The total market closed the month down -1% compared to April 2016, following the conservative spending trend from large advertisers that were highlighted in Q1 earning reports.
In April 2017, the national television market was down slightly, as advertising spend saw an incremental decrease of -1% year-over-year. Across both Cable and Broadcast television, the biggest decline in advertising spend came from Automotive Vehicles and Dealerships, which continues to decrease its spend – this month, by -17 % YoY. April also saw decreased advertising spend from Food, Produce and Dairy by -4%, and the Telecommunications industry, which decreased spend by -12%. Even with increases from other top spenders like Prescription Pharmaceuticals, which increased spend by +2% and QSR, which grew by +7%, the decrease from Automotive advertisers is taking its toll on the industry.
Broadcast networks saw a +8% increase in advertising year-over-year in April, while Cable networks saw a -7% decrease across all dayparts and genres.
BASKETBALL, BASEBALL AND HOCKEY, OH MY!
Broadcast’s hefty +8% increase is due entirely to the +154% increase in sports programming on broadcast – more specifically, the final three games of the March Madness tournament. CBS aired all three final games in 2017, compared to 2016 when all three aired on TBS – this gave the Broadcast networks the kick it needed this month. In fact, if you remove NCAA Basketball programming – both in-game ads and revenue from surrounding pre, post and talk shows – the Broadcast market saw a decrease of -5%. That said, the loss of these games on TBS, was also the biggest contributing factor to the -7% decline in Cable ad spend.
Diving further into the Final Four, and the NCAA Championship game, we saw a +5% increase on ad revenue on all shows surrounding the events in April – including talk and in-game ad revenue. Looking specifically at the cost for an average :30 second spot for an ad in the Final Four, and the Championship game, there was a +3% increase year-over year from $1,008,960 in 2016 to $1,040,489 in 2017.
Not to be outdone, the NBA and NHL also kicked off Playoffs and ended their regular seasons in April. ABC saw additional NBA games during the month, while NBC saw an increase in unit costs, and number of NHL playoff games aired, which also helped contribute to the overall increase in Broadcast spend. The NBA, however, also saw a few less games across TNT and ESPN than in April 2016, simply due to how the schedule fell, contributing to the fall on Cable.
Breaking down the NBA regular season, which runs from October – mid April, the 2016-2017 season saw a +15% increase year-over-year for in-game advertising spend, compared to the 2015-2016 season. This increase is not surprising, as the league had a huge bump in number of national games airing on ESPN, ABC and TNT, going from 143 in the 15-16 season to 165 in the 16-17 season.
The NBA Playoffs, which began April 15, 2017, increased by approximately +1% in revenue compared to the playoffs games in April, 2016. Looking at ESPN, ABC and TNT, the average unit cost for a :30 second spot during the NBA playoffs is up by approximately +5% going from $88,299 in 2016 to $92,691 in 2017.
Switching to the NHL, games across all networks airing regular season NHL games saw a +11% increase for in-game advertising during the 2016- 2017 season, which also runs October – April. The 2017 Playoffs, haven’t been as successful with -10% less ad revenue than the previous year. This is due to fewer matchups going to a game 6, or 7, in the first round of the playoffs. This highlights how volatile non-NFL sports can be, as their schedules aren’t as guaranteed.
Last, but not least, the boys of summer returned and kicked off with a bang. All networks showing MLB games saw +15% increase for in-game ad revenue throughout the month.
“We continue to see a soft ad market with the pull back from the auto and CPG industries really impacting results. Sports programming continues to deliver for the networks and is currently underpinning the health of the TV market. The other bright spot is the continued strength of News programming that is shooting the lights out with sky-high ratings being delivered as the country is transfixed with the drama unfolding in Washington. Entertainment programming for the networks must be a major concern as many big shows are struggling across both broadcast and cable,” said James Fennessy, CEO of Standard Media Index.
TELEVISION BEYOND SPORTS
While sports programming carried the month, it’s worth noting that news continues to see increases across both Broadcast and Cable. Broadcast news programming saw +17% increase in ad revenue, while Cable news saw +11%.
The big three Cable News channels continue to see increases above the industry average. FOX News increased by +12%, CNN by +16%, and MSNBC by +63% on a year-over-year basis, on their news programming across all dayparts. Probably the biggest ad story in April, the loss of Bill O’Reilly to FOX News, really becomes a blip on the radar, as it did not appear to influence ad revenue for FOX News, and The O’Reilly Factor still had the highest average unit cost across cable news for the month, at approximately $16,000. More time is needed to determine if there will be greater impact down the road.
BROADCAST ENTERTAINMENT TAKES A HIT
The Broadcast entertainment genre lost -15% of spend compared to the same period in 2016, with drama, reality and comedy all seeing losses. Almost half this drop can be attributed to the running of NCAA programming on CBS rather than normal programming.
While CBS saw the biggest YoY loss in the primetime entertainment genre, due to the NCAA finals games, Fox also saw a significant year-over-year drop due to losing American Idol, which brought in substantial revenue in its last season on FOX in 2016. The decline can also be attributed to a decrease in revenue from the network’s hit show Empire. While the show’s average cost for a :30 second spot was relatively flat only decreasing -3% from $551,561 to $536,074, the show saw a substantial increase in ADUs or make-goods, resulting in an overall decrease.
DIGITAL CONTINUES ITS 2017 FLATTENING
Single digit growth rate has recently become the norm for the Digital sector. In April, the Digital market grew just +3%, with much of that growth coming from the Telecommunications industry, which increased spend by +24% year-over-year. Financial Services and Food, Produce, and Dairy also increased spend for the month by +19% and +33%. But, the market was held back by a decrease of -24% from Automotive Vehicles and Dealerships, just like television, and -13% from Specialty Retailers.
Of note, Search saw +2% increase year-over-year, and Video and Social are keeping the genre afloat with +6% and +10% increases year-over-year. This too follows the trend we’ve seen throughout 2017, but we are beginning to see even the growth rates in Video and Social begin to slow more than they did in Q1.
“The digital market hasn’t rebounded from the viewability and safety concerns that came to the forefront late last year, and advertisers are yet to jump back in and show they are confident that these issues have been meaningfully addressed,” said Fennessy.