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September Ad Market Uptick Despite Soft TV Spend

October 21st 2015

New York, 20th Oct 2015 – Accelerating digital media spending kept the advertising market in positive territory in September as declining television ratings impacted ad spend, said Standard Media Index as it published its latest results today. The overall market rose by +6% year-on-year.

The advertising sector was lifted by double-digit rises in digital (+29%) and newspaper (+18%) spending in September, however the start of the 2015-16 television season failed to deliver ad dollars to the market, dropping by -4% YoY, despite a much-hyped programming line-up that included high-profile new late night TV presenters. All television sectors saw declines.

SMI’s data showed that the ad market delivered +9% year-on-year growth for the third quarter, which is a strong increase as it faced comparisons to the 2014 quarter which generated over $500 million in FIFA World Cup ad revenue.

“September’s results again show that a healthy ad market continues to be driven by a robust digital sector. Television is experiencing considerable rating challenges and this is definitely flowing through to revenue,” said James Fennessy, SMI’s chief commercial officer.

“The hope is that new season programming will drive audiences back to the traditional networks but we haven’t seen this just yet. Social, video and internet radio are going gang busters and we don’t see this trend changing anytime soon. Newspapers continue to find new and innovative ways of monetizing their reach, which is showing up in strong quarterly results. Magazines, on the other hand, continue to struggle and the downward trend has been consistent for quite a few quarters now.”

The overall ad market’s substantial quarterly growth comes as most analysts’ forecast that consumer spending will fall sharply in the July-September quarter to an annual pace of about 1.5 percent from 3.9 percent in April-June.

Television ad revenues stayed flat year-on-year for the third quarter, in line with falls in C3 ratings across the board. Major television events like the Republican Party presidential debates and the NFL and College Football season kick-offs were unable to boost TV network revenues enough to deliver gains.

SMI SEPTEMBER AD MARKET HIGHLIGHTS

  • In September, cable TV fell by -5% and broadcast TV ad spend slipped by -4% year-on-year. Syndication fell sharply by -14% in the month.
  • Reporting on 80% of the total national ad spending from global agencies, cable TV stayed relatively flat for the quarter and broadcast TV declined by -3% year-on-year. Overall television spending stayed flat in Q3 when compared to the same time in 2014.
  • For the full 2014-15 broadcast year, SMI’s data recorded a -4% decline for the television sector. All parts of the TV sector were down, except for Local/MSO cable (+3%).
  • The best performers of the broadcast networks in September were ABC, Univision and Telemundo, which saw healthy single-digit revenue rises. ABC and Telemundo were the only broadcast networks to post positive gains for the quarter.
  • Cable networks AMC, HGTV, Food Network and ABC Family attracted significant double-digit percentage increases in September, thanks to new programming and seasonal trends. Scripps and AMC both delivered solid growth numbers for the quarter and were the only network groups to deliver a positive result.
  • Broadcast TV advertisers invested more heavily in the scatter market in September compared to the same period in 2014. The market grew by +3% YoY. Cable scatter spending saw a steep -11% year-on-year decline for the month, which contributed to a -5% decrease for the overall scatter market.
  • Total buys were lower in the upfront market during September. Single-digit drops in both broadcast and cable TV contributed to a -4% year-on-year decline.
  • Ad revenues in the digital sector jumped by +29% for September and +27% for Q3 YoY. Social media websites (+105%), video sites (+67%) and internet radio (+56%) posted significant increases and propelled growth for the sector in the month.
  • Despite vigorous growth in previous months, the out of home sector posted a -16% year-on-year drop in September. However, it finished +16% up for the third quarter.
  • In the print market, newspapers recorded a stellar month with +18% growth however the magazine market saw a -11% YoY decline. Newspapers finished up +16% for the quarter but magazines dropped -9% in the same period.
  • Radio ad revenues decreased -3% year-on-year in September when compared to the same time last year.
  • SMI’s September data shows that the top three growing product categories are prescription pharmaceuticals (+41%), household supplies (+20%) and food, produce and dairy advertisers (+6%).

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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