Big TV networks won’t sell as many commercials this year

Big TV networks won’t sell as many commercials this year

By Claire Atkinson June 14, 2017 | 11:18am | Updated

This year is looking bleak for TV commercials.

For the first time since 2009, the global TV business will see a fall-off in ad sales revenue, according to Magna, the research and investment unit of Interpublic Group.

The strategy firm’s spring update to its annual forecast says ad sales at the main TV broadcast networks will fall 6 percent, to $13.7 billion, in 2017, excluding Spanish-language outlets, as demand tanks for spots selling everything from beer to department store duds.

In cable, the number will drop 1 percent, to $25.8 billion, according to Magna.

The projected drop-off is partly driven by a lack of political and Olympic ad dollars as opposed to last year’s bonanza, according to the report. But it’s also a result of ratings declines coupled with softer price increases, the firm noted.

“Those poor ratings contributed to advertising sales being down,” the report states.

This spring’s upfront negotiations, whereby TV advertisers commit their ad dollars in advance of their ad placements, have been slow. Sources tell The Post that advertisers are prepared to pay a premium to hold on to their money and place it when they need to in the so-called scatter market.

NBCUniversal, Fox and ABC have begun talks with advertisers, according to a report from Variety that suggests advertisers are trying to hold the line on the typical percentage price increases.

Magna’s global forecast says part of the reason for declines is the number of big ad categories that are pulling back.

In the US, the food and beverage category has dried up in a big way, with beer spending off 30 percent in the first quarter of this year. Retail dropped 3 percent, driven by a 21 percent plunge in ad dollars from department stores over the same period last year, according to Magna statistics. Retail outlets have been shutting stores as shoppers turn to online services for their needs.

Auto ad sales were off 12 percent in the same period, making life difficult for local media companies.

Local TV, which typically sees a bigger boost from political campaigns, is expected to fall 13 percent, to $20 billion, in 2017.

Among the other full-year ad forecasts from the report:

·        Broadcast radio will decline 4.4 percent, to $13.4 billion, an acceleration of the 3 percent decline in 2016.
·        Out-of-home advertising, including cinema, is expected to grow 2 percent, to $7.9 billion.
·        Print ad sales will fall 13 percent, to $18.1 billion, a third of what the sector captured 10 years ago.
·        Digital media ad sales will jump 14 percent, to $83 billion, and will account for 45 percent of media spending. Within that category, mobile advertising is growing 34 percent, to $48 billion.


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