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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