Year in Review (January – November 2015): The Best Comes Last

The year 2015 may have started out with a whimper, but it’s ending with a bang for media companies judging by their ad spend results.

Agency bookings for October and November were significantly better than the previous months. In fact, Standard Media Index’s findings show that November’s results for total media ad spend was 23% higher than the same month last year. That is an amazing 16% higher than the previous record-breaking month within the last six years. (SMI has been tracking agency bookings in 2009.)

As we flip the calendar to a whole new year, it’s likely that the upbeat trend will continue, with media companies benefiting from the Olympics in Rio next summer, higher upfront pricing than broadcast year 2014-15, the political election cycle and the likelihood that ratings will remain strong.

Results for the first nine months of 2015 were dampened by several factors. There were no Olympic or World Cup games. The 2014-15 upfront market was disappointing. And digital, while drawing new dollars to media as a whole, kept chipping at away other sectors, like television, print and radio.

Standard Media Index’s extensive database shows an equal split between media “winners” and “losers” for the January to October period. When judging the first 10 months against the same period last year, the comparison shows:

• Digital up 23%;
• Out of Home up 11%;
• Newspapers up 4%;
• TV down 3%;
• Radio down 5%;
• Magazines down 6%.

The TV sector has undergone a spectacular change more recently. Comparisons between November 2015 to November 2014 show:

• The local/MSO cable category grew 28%;
• Syndication rose 25%;
• TV networks’ digital business rose 21%;
• Cable networks were up 18%;
• Broadcast networks up 15%;

Advertisers spread some love in other media categories as well. When looking at November 2015 Vs. November 2014, SMI’s results show:

• Total digital was up 37%;
• Within digital, pureplay social was up 116;
• Newspapers grew 22%;
• Radio rose 24%;
• Out of home zoomed 44% higher.

There were several positive trends this year related to certain types of advertisers. For example when looking at the first 10 months, automotive vehicles and dealerships showed ad spend revenue rises in three TV sectors in comparison with the same period in 2014:

• Cable networks (4%);
• Local/MSO cable (7%);
• TV digital (3%).

In the same period, pharmaceuticals and prescription advertisers showed growth for three TV groups:

Broadcast networks (30%); Cable networks (12%); Syndication (26%).

And insurance was a standout for three TV groups:

• Cable networks (6%);
• Spot TV (39%);
• Syndication (4%).

The upfront market for broadcast year 2014-15 was like a bad head cold that didn’t clear up until it was all over. The broadcast networks were down in upfront spending from the first quarter through the third quarter – although the negative numbers progressively improved, from a negative 16% in Q1 to minus 2% in Q3.

Broadcast network scatter was progressively worse as the year went on, moving from 3% growth in Q1, to flat in Q2 and then down 9% in Q3.

Cable networks’ upfront ad spend was a little better, but they were in negative territory for the first two quarters (down 8% and 1%, respectively). And in Q3 the cable networks were flat. In scatter, cable networks were up single-digit percentages in all three quarters, moving from up 7% to 5% then 2%.

But what a difference a few months can make. In November, broadcast upfront dollars and cable networks grew in the double-digits.

Of course, the negative comparisons in the first three quarters are at least partially due to two huge events in 2014: the Sochi Winter Olympics and the World Cup. And they also reflect the huge and growing allure of digital solutions.

SMI’s analysis of the first nine months of broadcast year 2014-15 (October 2014 to September 2015) revealed that digital ad spend was up 16%, growing by $1 billion in the period. Some of that revenue was completely new and organic growth, but a significant amount was siphoned from other media, mostly from TV.

While the digital erosion could accelerate in the new year, the combination of a stronger upfront, political dollars and the Summer Olympics in Rio should make 2016 a very rewarding year.