US Ad Market is Flat for Second Quarter in a Row, Market Through First Three Quarters of the Year Still up +2.3%October 25th 2017
Standard Media Index (SMI), the advertising intelligence company bringing clarity to the ad industry, today unveiled updated advertising revenue figures for Q3 and September 2017. In Q3 2017, the total advertising market was up nominally at +0.6%. September, similarly saw incremental growth up +1%, compared to September 2016. However, when you look at the market calendar year-to-date (Q1 – Q3 16 vs. Q1 – Q3 17), the ad market grew +2.3%.
The Q3 and September increases in revenue can be attributed mostly to Digital, which saw an +11% increase in Q3 2017, and +5% more spend in September 2017. On the quarter, Out-of-Home advertising and Radio also saw marginal increases with +0.5% and +2%, respectively. Looking at year-over-year growth in September, Out-of-Home saw the largest percentage increase of any media type with +9%. Radio, on the other hand, declined in September with -3% year-over-year.
National TV was down -11% on the quarter, due to the dominance of the 2016 Olympics in the previous year. In September, the media type saw less of a decline with just -3%, year-over-year. Print declined -12% in Q3 2017, and -15% in September 2017. Newspapers were down -11% in Q3, and -12% in September. Magazines saw an even deeper decline with -12% in Q3 and -16% in September.
NATIONAL TELEVISION BY THE NUMBERS
In Q3, the Broadcast market was down -24%, as it is still seeing the effects from the 2016 Olympics; Cable was down just -2% on the quarter. In September, Broadcast was down -5% compared to the previous year, while Cable stayed consistent with the quarter down -2%. Through the first three quarters of the year, Broadcast is down -4.6% and Cable is down -2.4%.
BREAKING DOWN BROADCAST IN SEPTEMBER
Much of the decline in September’s Broadcast market stem from Entertainment programming which saw a -15% decrease across all networks compared to September 2016. Looking at just the Prime-Time daypart, across the big four networks, that decrease goes to nearly -18%. This is due to changes in premiere schedules across all four networks. In 2016, premiere week started in the third week of September. This year, premieres started in the fourth week of September. This means that nearly a whole week of new, Prime-Time shows did not air in 2017.
When you look at the networks overall (all program genres + dayparts), we see ABC is most affected by this change in programming with -20% YoY decline. It also lost revenue it had in 2016 from the Emmys, which aired on CBS in 2017. CBS, consequently, was the only network of the four to increase Entertainment spend with a +5% increase YoY. However, looking across daypart and genres, the network lost -7%, as it aired two less NFL games in September 2017, compared to September 2016. NBC and FOX, saw increases in their revenue from NFL games, that have helped make up the deficit from Entertainment programs, putting the networks at +4% and +5%, for the month.
Across all genres and dayparts on the networks, ADUs or makegoods were flat, with just +0.5% more than in September 2016.
“The big story for September is the pricing and revenue strength of the NFL in the face of soft ratings and PR challenges. The league continues to demonstrate that large, engaged and real audiences are still the number one priority for brands and they are willing to pay a premium for this, “said James Fennessy, CEO of Standard Media Index. “Shifts in programming across months and between networks makes comparisons difficult for the entertainment networks in September but we are seeing that a number of major drama originals are really suffering from steep average unit pricing declines off the back of ratings challenges.”
CLASSIFYING CABLE IN SEPTEMBER
Cables -2% decrease can be attributed to both Entertainment and News programming. Sports, on the other hand, saw an +8% increase compared to the previous year.
Much of that increase can be attributed to NFL Network which saw +96% more ad revenue from national, in-game ads, after picking up an additional game compared to September 2016. Revenue around NCAA Football also increased by +3%. FOX Sports 1 saw the bulk of that increase with +33% more revenue. ESPN also saw an increase with +2% more spend.
This is the first time we’ve seen a decrease in Cable news since the 2016 election. Across all Cable News Programs, revenue fell -7% compared to September 2016. If you were to look at Q3, news programs would still be up by +2%, but this does show we’re starting to get to the heavy months of 2016.
FOX News has taken the biggest hit with -17% less spend on news programming in September 2017 compared to September 2016. CNN also saw a small decrease of -1%, while MSNBC continued to grow, though marginally compared to other months, with +2% increase.
While many of FOX News Prime-Time shows still have the highest unit costs on Cable News including FOX News Tonight going for approximately $15,200 a spot, Tucker Carlson Tonight with $12,200 a spot and Hannity at $8,500 a spot, in September 2017, they do pale in comparison to the $31,300 average spot cost it brought in around the September 2016 presidential debate. This, compounded with average unit costs around non-Prime-Time shows falling slightly, and -1% less commercial load than in Sept. 2016, is what’s affecting revenue on the network.
MSNBC’s line-up of shows continues to see increased unit costs, even as we are now looking at year-over-year changes to key election months. The Rachel Maddow Show has an average unit cost of $4,600 compared to $3,800. The Last Word with Lawrence O’Donnell went from $3,100 in September 2016 to $3,700 in September 2017, and All in with Chris Hayes increased to $3,300 from $2,700.
SEPTEMBER TELEVISION BY CATEGORY
Across Broadcast, the Auto category continued to decrease its spend in the marketplace with
-12% less in September 2017, than 2017. Telecommunications also decreased spend by -13% and the Entertainment category decreased by -20%. On the positive side, Pharma – Prescription increased spend by +4%, Insurance increased by +3% and Consumer Electronics grew by +8%.
Looking at all Cable networks, the Auto category decreased it’s spend by -5%, Entertainment was down -27% and Telecommunications was down – 11%. On the positive side, QSR advertising saw a +7% increase in spend, Beauty saw +4% increase, and Travel, Hospitality and Tourism, saw a huge increase of +47%. That increase spans all 3 major program genres – with spend around Entertainment programs seeing the biggest jump of +50%.
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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%.