U.S. TV Ad Spend Starts 2016 on a High Note

NEW YORK: The U.S. television sector saw a 1 percent increase in ad spending in January, according to Standard Media Index’s (SMI) latest data, with broadcast networks showing a 9 percent gain.

Broadcast ad revenues were driven by healthy network ratings in January, which included the rebooted classic of The X-Files and bumper audiences for football. The top six broadcast networks saw ad sales growth of 10 percent year-on-year in January 2016. CBS and NBC saw double-digit increases thanks to strong ratings.

Cable TV advertising was down 3 percent for the month. Cable networks TBS, HGTV and Freeform continued their strong performance again in January with healthy double-digit percentage rises. ESPN had been a strong cable contender in past months, however, the network moved its semifinals of the College Football Playoffs from New Year’s Day to New Year’s Eve in 2015, which affected its ratings and ad revenues.

Digital media delivered a 16 percent gain year-on-year. Digital’s share of total ad spend in January 2016 has increased to 27 percent, rising by 3 points compared to 2015.

Television’s total market share is currently 59 percent, having dropped by 2 percentage points from January 2015. Reporting on 80 percent of national advertising from global agencies, SMI’s data shows that syndication, local/MSO cable and spot TV all fell by single digits in the month. SMI’s data recorded a relatively flat month for upfront ad spending, driven by broadcast’s 1 percent growth and cable’s 1 percent decline.

James Fennessy, SMI’s CEO, said: “January’s results are encouraging given current market uncertainty. Improved ratings, driven by the outstanding performance of the NFL, have delivered healthy growth for major broadcasters, even with a slight dip in ratings for the month. Cable hasn’t been as fortunate as revenue declines are tracking closely with softer ratings.”

Fennessy added: “Digital continues to deliver healthy double-digit gains and, while this growth looks to be mostly organic, there is little doubt that the print and radio sectors are being negatively impacted. The one other bright spot is out of home advertising which continues to build on the great momentum generated in late 2015.”