Cable has been increasing the amount of paid commercial time per hour by 2% to 3% a year since 2010, a fact that Kantar media Intelligence says has contributed to cable’s increase in advertising revenue, but should also give advertisers pause.
“Cable network advertisers may want to take note that while they’re buying into an environment that may be efficiently targeted to their audiences, it’s also increasingly clutter,” writes Jon Swallen, chief research officer of Kantar Media Intelligence North America in a post on the company’s Insights website.
Swallen says that at the same time paid advertising time is rising on cable by about one 20-second spot per hour annually, promotional time has been rising as well. That contrasts with broadcast, which has been basically flat.
In his post, Swallen doesn’t say how much commercial time cable networks run, or which run the most. There have been several articles in the past year about Viacom’s networks increasing their commercial load, but Nielsen, which tracks commercial ratings for the networks and for advertisers, doesn’t publicly disclose its clutter figures.
According to Kantar, ad time on the broadcast networks dropped 1% between 2010 and 2011, and rose 0.2% from 2011 to 2011. In the first quarter of 2013, cable paid ad time rose 2% while broadcast ad time fell 2.4%.
Swallen suggested that the extra inventory available on cable contributes to cable’s faster ad revenue growth. According to Kantar Media data, ad spending on cable jumped by 25% from January 2010 through March 2013, while broadcast ad revenues grew only 11%.
While some of this is accounted for by the conventional wisdom that ad dollars follow eyeballs as cable viewing has grown, “the underappreciated fact is that cable has been padding its ad revenue by steadily inserting more paid commercial time into its programming,” Swallen says.
“The volume of paid ads on cable has been rising between 2-3% each year; this basically translates into the annual addition of one more 20-second spot per hour,” he says. “Ultimately, this added volume accounts for more than one-third of the total growth in cable ad spending since the recession.”