Advertisers continued to switch off from TV in the last quarter.
So much so, that Standard Media Index (SMI) — which claims to pull 80% of US ad agency spend from the booking systems of five of the six global media holding groups, as well as some independent agencies — described the television sector’s performance in the fourth quarter of 2014 as “paltry” and “lackluster” in its latest quarterly ad spend report.
Spend on TV advertising in the US dropped 2% year on year in the final quarter of 2014 (October: -9%; November: -6%; December: flat.)
National broadcast spend TV spend fell 2% to $US4.8 billion, while ad spend on cable networks dropped 1.6% to $US6.8 billion.
On the broadcast side, performances were a mixed bag over Q4:
- NBC up 3%
- CBS up 3%
- Telemundo up 5%
- Fox down 12%
- Univision down 6%
- ABC down 2%
The computer and software category decreased its investment in TV by a huge 40% in the fourth quarter. Beauty, grooming and personal care brands wound down their investment in TV year-over-year by 20%, while the restaurant industry dialed down TV spend by 11%.
However, there were some categories that did increase their investment in TV in the final quarter: Consumer electronics (up 24%); clothing, fashion and accessories (up 22%); and pharmaceuticals (up 14%).
TV investment was largely led buy the scatter market, where TV ads are sold closer to the date of broadcast, rather than advertisers buying in the bigger, locked-in chunks of the upfront market. The scatter market was up 28% year on year. Meanwhile, the upfront market — which tends to command higher ad rates — was down 7%.
The trend continues: Advertisers are waiting until far later in the day to make their advertising decisions in favour of more flexible media
While it continues to cannibalise some TV ad spend, the growth of digital has also begun offering some light relief broadcasters, particularly on the video side. SMI is not yet providing raw dollar figures here, but did say it is an area which is showing strong signs of growth.
NBC.com and ESPN.com, for example, saw 104% and 70% growth respectively in ad spend on their online video offerings in Q4 — although these ads will obviously be sold at a much lower rate compared with TV airtime.
The poor performance of the TV market also dragged down the total ad US market in the final quarter. Ad spend was flat year on year, but despite zero growth in Q4, the total ad market grew 6% over 2014 in its entirety. That was largely driven by digital’s unabated growth, with spending across programmatic, mobile, display, search and video surging 15% in the quarter.
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