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Continued TV Strength Points to Strong Upfront

June 22nd 2016

New York, 21st Jun 2016 – As the dust settles from last month’s upfront presentations, the television sector showed that it was moderately more vibrant in May than it was the same time a year ago – a positive sign as negotiations for TV’s 2016-17 upfront marketplace gain pace

Television and digital media were responsible for driving the overall advertising market into positive territory in May, where total demand increased by 8% on a year-on-year basis.

Despite recent ratings results which suggested a lack enthusiasm for summer programming, cable TV advertising (up 6%) performed strongly in the month, however broadcast networks dipped into negative territory (-1%) when compared to 2015. On a broadcast year-to-date basis, both cable (2%) and broadcast (7%) showed solid growth.

Latest SMI data also tracked strong results in upfront and scatter. While upfront spending has risen 2% through the first eight months of the 2015-16 broadcast year (October-May), the scatter marketplace has expanded eight times that rate: +16%. Both markets grew by 5% YoY across national TV in May.

“Off the back of May’s strong results, we expect the networks to deliver very healthy upfront increases in the coming weeks. A 16% increase in scatter dollars through the first half of the broadcast year proves that advertisers are moving money back to TV after some experimentation in digital last year, which didn’t drive the results brands were hoping for,” said James Fennessy, SMI’s CEO.

“It is also fascinating to see the big slowdown in search dollars and the recognition that digital video is where a lot of the action will be happening in the coming months. Excellent new video products from both traditional and new media are capturing an increasing share of the market and we expect this to accelerate as greater and better inventory becomes available.”

In SMI’s fastest-growing sector, marketers increased their investment in digital media by 15% YoY in May, despite digital’s largest category, search, declining by -10% YoY.

SMI MAY AD MARKET HIGHLIGHTS

  • Total television – including national TV, Spot TV, Syndication and Local MSO/Cable – rose by 4% YoY in May.
  • Total TV revenues are 5% greater in this broadcast year-to-date (Oct-May) compared to 2015.
  • Upfront spending on Cable TV grew by 10% YoY in May, however advertisers pulled back in broadcast, which decreased by -3% YoY. Total upfront ad investment jumped by 5% YoY.
  • The scatter market also jumped by 5% YoY in May. Scatter dollars in the Cable TV market accelerated by 6% and broadcast rose by 4% compared to the same time in 2015.
  • Low debut numbers for summer programming affected combined ad revenues for the top six broadcast networks, which declined -2% year-on-year.
  • Univision and Telemundo were the standout performers in broadcast television during May.
  • SMI data showed that Cable TV continued its strong run in May. Advertisers shifted 6% more dollars into the top 20 networks in May 2016 compared to last year.
  • Marketers favored AMC, HGTV and Discovery Channel in the cable market during May. The networks each saw double-digit percentage increases on a year-on-year basis.
  • With arguably the most hyped-summer program, Animal Kingdom, about to debut on its network, TNT garnered 5% more dollars in May than it did the same time in 2015.
  • Advertising on video sites (55%), social media sites (44%), and ad networks/ad exchanges (28%) saw the largest YoY gains, as new players like Snapchat, YouTube and Spotify ramp up their video offerings and start to aggressively target video advertisers.
  • In May, ad revenues for newspapers were down -8% YoY. SMI’s results follow a recent report that highlighted that newspapers shed 7% of their circulation in 2015, the worst year since 2010.
  • Elsewhere in the print market, magazines declined by -2% YoY in May.
  • The out of home market enjoyed a stellar month with 29% YoY growth, as advertisers revived the channel after some consecutive months of slower growth.
  • Radio ad revenues recorded 13% year-on-year growth in May.
  • The best performing advertiser categories for May 2016 were quick serve restaurants (36%), financial services (29%) and prescription pharmaceuticals (20%).

May Ad Market – Media Type – May 16 YoY Growth

Television Cable TV 6% Broadcast TV-1% Spot TV 6% Syndication 12% Local/MSO Cable 14%Television Total 4%

Digital Pure Play – Search -10% Pure Play – Content 12% Ad Network/Ad Exchange 28% TV Network – Digital -3% Pure Play – Video 55% Pure Play – Social 44% Pure Play – Digital 7% Pure Play – Internet Radio 23% * Mobile Ad Network/Ad Exchange 13%

  • Magazines Total -2%
  • Digital Total 15%
  • Newspapers Total -8%
  • Radio Total 13%
  • Out of Home Total 29%
  • Grand Total 8%

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.

SMI Team

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