February Shows First Signs of Slowing Ad Market in Recent MonthsMarch 25th 2017
New York, 24th Mar 2017 – Standard Media Index (SMI), the company bringing transparency to advertising data, today unveiled updated figures for February 2017. SMI total market closed the month flat with no change on a year-on-year basis. The market also registered the lowest growth rate to digital advertising spend since it started monitoring ad expenditures in 2009. While growth rates across the board in February 2017 were low, it must also be noted that February 2016 was a leap year, giving the month one extra day, or approximately 3.5 percent more time, to accumulate spend over that of February 2017.
2017 IS SHAPING UP TO BE DIGITAL’S TOUGHEST YEAR YET
For the first two months of 2017, digital has seen growth rates usually akin to television, or other traditional ad platforms. In February 2017, spend on all digital platforms rose just +3.7 percent. Pure-play video and pure-play social platforms continue to be digital’s engine growing +26.6 percent and + 9.9 percent respectively. digital – print platforms also saw a small rise with +3.8 percent growth. Nearly all other digital platform sub types saw declines, contributing to the slower overall growth rate.
Google remained essentially flat seeing little growth from the same month in 2016. Facebook didn’t seem affected by the loss of a day, with a remarkable double digit growth of +23.1 percent on the year. Snapchat, who has seen an extensive uptick in last six months, continued that trend with +194.0 percent growth in February 2017.
NATIONAL TELEVISION SEES LOW KEY FEBRUARY
Overall, the February 2017 national television market was flat, with a +0.4 percent increase, showing the first sign of slowing down in recent months, mirroring the overall market. The cable industry grew slightly with a +1.4 percent increase year-over-year. The broadcast industry saw a decrease of -0.6 percent, thanks to hefty spend declines from big category spenders like Automotive, -11.6 percent, and Pharma Prescription -10 percent.
When you look at just sports programming, the National TV market grew +4.8 percent. Cable saw a bulk of the growth with +19.0 percent while broadcast saw a decline of -1.9 percent.
Looking at other individual program genres, we see broadcast entertainment decreased -6.4% across all dayparts, while spend on broadcast news increased +15.1%. When highlighting just the top four networks (NBC, ABC, CBS and FOX) in broadcast entertainment prime time the market fell -2.3 percent. NBC saw the biggest increase with +11.3 percent on the year thanks to its breakout hit This Is Us. The show garnered the highest average :30 second unit price for any hour-long drama on broadcast television in February. CBS’s The Big Bang Theory took the prize in comedy with an average spot going for $248,077, though that’s around -10 percent less than its price in February 2016.
Taking a step back, of the big four broadcast networks across all dayparts and genres, FOX increased +341 percent thanks to the Super Bowl, while CBS lost some share -57.6 percent after airing the Super Bowl in 2016. NBC grew across all dayparts, while ABC continues to see a decline in ad revenue, with -11.1% YoY.
Within cable, news had its lowest increase since the election to +7.0 percent and entertainment saw just +2.4 percent. Interestingly when you look at just prime time cable news you see +30.9 percent, showing that the interest is still very high, advertisers are just getting more targeted with their dollars.
Drilling further into cable networks, we see Turner’s TNT and TBS both saw increases in spend with +11.3 percent and +2.0 percent, respectively. USA Network saw a -16.5 percent decline while HGTV continued to see steady growth with +5.5 percent. Viacom’s MTV and Comedy Central declined by double digits after a few months of growth.
“After explosive digital growth over the past three years, the past six months have shown that a sizeable number of brands went too far and have started reassessing based on quality issues and falling sales. We expect this trend to accelerate in the coming months as the issues with YouTube are certain to have an impact on spend on non-premium platforms.” Said James Fennessy, CEO of Standard Media Index. “Our February data reinforces the need for advertisers to properly balance between traditional and digital and the importance we see brands putting on safety, environment and context.”
RADIO, PRINT, OUT-OF-HOME AND NEWSPAPER ALL SEE DOUBLE DIGITAL DECLINES
Beyond TV and digital, the advertising market did not fair wall in February 2017. After a strong increase in January 2017, the industry saw a -10.6 percent decline in spend on the medium. Similarly, magazines saw -12.0 percent, Newspapers saw -15.0 percent and radio so a -31.3 percent.
National Advertising Market Gains 5% in Q2
The National Advertising market gained 5% in Q2, despite a modest decline in National TV when factoring out the World Cup. Looking across platforms, Digital was the strongest performer this quarter.
National TV Jumps 4% in April
National TV increased ad revenue 4% in April YOY, with Cable up 6% and Broadcast flat. These figures exclude the NCAA Basketball Final Four Semifinals.