July Ad Market Delivers Strong Growth Thanks to Digital, Radio and Cable SportsAugust 18th 2017
Standard Media Index (SMI), the advertising intelligence company bringing clarity to the ad industry, today unveiled updated advertising revenue figures for July 2017. The total advertising market closed up +12% compared to July 2016, thanks to Digital’s +19% YoY growth and an increase from Radio, which saw an astounding +22% YoY Growth. The National TV market ended July up +2.5% and Out-of-Home saw a rise of +2% compared to July 2016. Newspapers and Magazines still saw decreases of -16% and -6% compared to July 2016, respectively, but those declines are much less than where both ended Q2 2017.
SPORTS POWERS CABLE’S GROWTH
National TV’s +2.5% increase came mostly from Cable networks, which saw a +3.7% increase. Broadcast networks were nearly flat with a +0.3% increase compared to July 2016. According to Brian Wieser’s recent update, the total use of television across the entire day fell be -2.8% in July 2017. While we’re not seeing this trend replicated in advertising dollars, it’s likely the effect won’t take place until August or September, which we’ll be monitoring.
Most of the growth in Cable stems from a nearly 30% increase in spend around sports programming for the month of July. This comes from a few key changes to programming across the genre. For instance, the 2017 Wimbledon Championship was entirely in July in 2017, while the 2016 tournament had four days of play in June. The entire tournament aired on ESPN and ESPN2. Additionally, the X Games took place in June in 2016, but aired in July in 2017, giving both ESPN and the Cable sports genre a bump. ESPN also benefitted from an increase in spend around its sports talk shows, as unit costs were up across many of its shows this month putting the network up +12% YoY.
LACK OF OLYMPIC SPEND ALREADY IMPACTING BROADCAST SPORTS
Conversely, Broadcast networks saw a -13% decline in ad spend around sports programming, compared to July 2016. This is mainly due to no Olympic trials, which brought in more than $20M in July 2016, and the move of the PGA Championship back to August. The golf tournament typically airs in August, but because of the 2016 Olympics, it aired in July last year.
The decreases in spend above outweighed the addition of $25M in spend that came from the Copa Oro 2017 CONCACAF, which aired mainly on Univision. While it didn’t push all of Broadcast forward, the addition of Copa Oro 2017 CONCACAF, and episodes of José de Egipto and La doble vida de Estela Carrillo, did propel the Spanish language network ahead of FOX, in terms of overall ad spend collected for the month of July 2017. FOX did stand out in Sports with an increase in unit cost around the MLB All-Star Game, with a slight increase from $398K in 2016 to $401K in 2017.
BROADCAST PRIME-TIME ENTERTAINMENT FINALLY SEES GROWTH IN JULY
Looking across Entertainment Prime-Time – ABC was up +25%, NBC was up +12%, CBS was up +5%, while FOX saw a -9% decrease. Altogether, the four networks saw a +10% increase across the coveted day part. ABC’s increase came from a 65% uptick in spend around The Bachelorette this July, a +13% increase in spend around the Espy’s, and higher unit costs on its Summer of Fun & Games programming. CBS’s growth is attributed to its most recent season of Big Brother which saw a +30% increase in revenue compared to July 2016, thanks to a slight increase in unit cost and a larger ad load. NBC growth stems from American Ninja Warrior, which saw 2 additional episodes air in July 2017, than in July 2016, creating a +41% revenue increase for the Prime Time Entertainment genre. Shows like Little Big Shots: Forever Young and The Wall, also performed well, making up for less America’s Got Talent episodes in the month.
When you look across the Prime-Time daypart on both Cable and Broadcast, including all program genres we see that ad spend was flat with +0.7% growth. Comparatively, Wieser noted use of totaltelevision viewing across the daypart was down -2.8%.
SECOND HALF OF YEAR STARTS WITH CABLE NEWS, LIFESTYLE STILL ON A TEAR
Cable News programming across the big three networks, MSNBC, FOX News and CNN, continues to grow with +11% increase across all three. Increases were slightly lower than in previous months, MSNBC +33%, FOX News +5% and CNN +10%, but that is to be expected as July 2016 brought the DNC and RNC conventions in on election year. The fact that Cable News is still increasing as we’re now comparing YoY to prominent election months, is quite telling that this trend might be here to stay.
HGTV continued its climb with +7% additional spend in July 2017 than in July 2016. E! also saw an increase of +9%, while WE Tv saw a +8% increase and The Travel Channel increased by +20%. Food Network was one of the only lifestyle networks to see a decline with -11% in ad revenue compared to July 2016.
NATIONAL TELEVISION SPEND BY AD CATEGORY
Across both Cable and Broadcast, Auto and Entertainment decreased their spend by around 15%, while Pharma- Prescriptions continued its spending spree with +18% additional spend in the TV market this July. Food, Produce and Dairy, also increased spend by +7% compared to July 2016, and took over the top spending spot by volume, which was held be Auto in 2016. Alcoholic Beverages, Telecommunications and Household Supplies also saw all increase spend by double digits with +19%, +12% and +32%, respectively. Unilever, which has been quite public about moving spend away from Digital and back to TV, added approximately 15% more spend to Cable and Broadcast in July 2017, than it had in July 2016.
“Despite national TV ratings challenges, the ad market opened the second half of the year with a real bang. Social and Premium Video remain the powerhouses of the digital sector and, after some weak performances in recent months, Prime Time Entertainment has come storming back which will be an enormous relief to the major networks,” said James Fennessy, CEO of Standard Media Index. “We continue to see major advertisers, like Unilever, return to the highly trusted medium of national TV at the expense of non-premium digital video. We expect this trend to continue as the networks strengthen their digital offerings and brands continue to question viewability and environment on non-premium platforms.”
RADIO SEES JULY BUMP
Following a few slower months, Radio saw an unprecedented increase in ad spend with +22%. The largest increases were on iHeart Radio Networks which saw a +41% increase in ad spend, and Premiere Radio Networks with a +44% increase. The biggest driver of increased spend comes from the Telecommunications industries which spent +50% more on ads on Radio in July 2017, than it did on July 2016 as wireless companies and phone manufacturers continue to put pressure on the market. Auto, which is decreasing spend on nearly every other medium also increased spend by +41% on Radio for the month.
DIGITAL SAYS GOODBYE TO SLOW GROWTH RATES
The Digital sector grew +19% in July 2017, putting any talk of a digital slow down on the backburner for now. Specifically, Social grew +34%, Search grew +21%, and Video grew +12%. The Video sector is split however, with Premium Video seeing more of the growth. For example, Hulu grew +37% in July while YouTube continues to struggle with confidence from larger brands, and saw a -15% decrease. TV Network-Digital also saw an increase with +11% more spend in July 2017, than in 2016.
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National Advertising Market Gains 10% in July
The National Advertising market gained 10% YoY, when factoring out the World Cup. Looking across platforms, Digital was the strongest performer this quarter, growing 17%. That was followed by National TV at 3% (excluding the World Cup), Out-of-Home at 1%, Radio flat, and Print at -18%.