TV Advertising Rebounds With A Strong Scatter Market


Author: Jason Keown
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The timing of the pandemic could not have come at a more inopportune time for the TV ad market. The effect of COVID-19, began in mid-March, shut down TV production studios that delayed program development. This prevented TV executives from creating a programming schedule to sell to advertisers in the upfront market. Additionally, in second quarter, when upfront ad negotiations typically begin, the ad market bottomed out. Needless to say, upfront negotiations in 2020 was unlike any other.

SMI’s US upfront/scatter report provides insight on where and when national TV ad dollars were allocated by programming genre and by broadcast or cable TV, during the first quarter (Oct-Dec 2020) of the 2020-21 broadcast season. With the pandemic causing shutdowns, many nervous ad buyers took a “wait and see approach” as to when new entertainment shows and live sports would return. As a result, while ad dollars for the upfront market in the quarter was down from the previous year, the scatter market proved to be stronger than usual as the TV ad market rallied.

SMSI data graph: Media Type Ad Revenue Q1 YoY

Broadcast TV

In the quarter, broadcast TV generated $5.19 billion in ad dollars in the US, a slight (-1%) decline from 2019. In total, for the quarter, the upfront for broadcast TV was $3.84 billion, a year-over-year decline of -8%. In contrast, the scatter market grew by +26% totalling $1.35 billion. For the quarter, scatter accounted for 25% of ad dollars, up from 20% one year prior.

Genre: Looking at genres, with the roll-out of entertainment shows delayed well into the quarter, ad dollars for upfront (-16%) and scatter (-11%) were both down compared to one year ago. When it became known live sports would return, the scatter ad dollars took off with ad spend up by a whopping +55%, compared to a relatively flat-3% for the sports upfront. Over one-half (56%) of all national ad dollars were allocated to sports. News with more stability had year-over-year upfront dollars at +2% and scatter at -1%.

Cable TV

For the quarter, cable generated $5.78 billion in ad spend, a year-over-year decline of -3%. In the quarter ad spend for the upfront ad dollars totalled $3.84 billion similar to broadcast TV and a drop-off of 14%. The cable scatter market grew by +28% reaching $1.94 billion. In 2020, the scatter market for cable garnered nearly 34% of ad dollars, compared to 25% the previous year. With a stronger scatter market, more ad dollars were allocated to cable than broadcast for the quarter.

Genre: Nearly three-quarters of ad dollars were spent on entertainment programs. Following a similar pattern, the upfront ad marketplace for entertainment programs fell by -14% but rebounded to +29% in scatter. In sports, upfront ad dollars were -22%, but unlike broadcast, scatter sports year-over-year was at -2%. Not surprisingly, cable news proved to be strong in upfront (+27%) and especially scatter (+71%).

Conclusion: Although there was some concern about the return of entertainment programs and sports, once both resumed, advertisers also returned, resulting in a stronger than usual scatter market. Despite the pandemic and sluggish ad market earlier in the year, the upfront and scatter marketplace produced $11 billion in ad dollars for the quarter, a slight year-over-year decline. This continues to enforce the notion of television advertising as a primary source for reach and brand awareness in a safe program environment. SMI will continue to follow the TV ad marketplace throughout the 2020-21 season.

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