SMI: TV Ad Spending Down 2.4% in November - Broadcasting & Cable

SMI: TV Ad Spending Down 2.4% in November

Fewer games, lower ratings for NFL reduce network revenue
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Lower ratings on NFL football—and four fewer games in the month—hurt TV ad revenue in November.

Advertising spending on TV was down 2.4% in November, according to the latest figures from research company Standard Media Index.

Spending on broadcast networks fell 10.6%, while cable was up 6.3%.

After NFL revenues increased for the networks in September and October, they declined in November. There were four fewer games televised in the month, which reduced spending. But on top of that, networks have had to give advertisers makegood commercials to cover some of the lower ratings games have been generating this season.

SMI says that NBC’s football revenue was down 17% from a year ago, despite broadcasting six games this year in November, the same a year ago. SMI said unit prices were up 10% to $720,949 in Sunday Night Football and Thursday Night Football. But 20% of NBC’s football inventory was used for makegoods, up from 5.2% a year ago.

CBS had one fewer NFL game and revenues were down 26%. SMI says that 20% of CBS’ football inventory went to makegoods, compared to 11% a year ago. The cost per spot was down 1%, SMI said.

Fox had three fewer games than a year ago, which reduced its football revenue by 34%. Unit costs were up 1% to $642,559, while the percentage of inventory going to makegoods rose moderately to 25% from 20% a year ago.

The average spot in an NFL game was $590,060, SMI said.

“November was a fascinating one for the sector with a lot of moving parts. The final days of election coverage, a challenging football season, and a revitalized retail sector all contributed to the market delivering a modest gain,” said James Fennessy, CEO of Standard Media Index.

“Poor football ratings earlier in the season, combined with fewer games this month, finally caught up with the major broadcasters whose revenue dropped more than 10% in November as they were forced to give inventory back to advertisers. Without sports, the major networks were slightly up as major retailers moved big money back into TV after some questionable experimentation with digital last holiday season,” Fennessy said.

November included the last week of the presidential election and SMI says both candidates spent money on football. Hillary Clinton’s campaign spent over $2.2 million during Week 9 NFL games trying for a last minute push. President-elect Donald Trump, on the other hand, only spent $1.2 million the last week of the election.

Election night is one of the only nights when a cable news network can bring in more for a 30-second spot than one of the big broadcasters. Both Fox News and CNN had higher average costs for the night than CBS, SMI said.

Excluding sports, primetime revenue fell 8.3% across the Big 4 broadcast networks. The average unit cost of a primetime spot was down 3.1% to $104,906.

NBC’s average primetime spot price was up to $100,900 from $99,000 a year ago. The highest average price per spot was on ABC at $112,899. ABC spot price was hurt by the absence of Scandal but helped by the American Music Awards, which garnered an average of $225,723 per commercial.

Spots in NBC’s Thanksgiving Day Parade drew $368,025 a piece, up 4%. For the telecast, NBC’s revenue was up 12%.

Among cable networks, E! jumped 24.1% and HGTV’s ad revenue was up 15.1%. SMI says that after seven quarter of declines, Viacom’s ad revenue was up almost 10% in November.

ESPN’s ad revenue was down 8.4%.

“Cable continued to perform strongly with the news networks taking big dollars in the lead up to the election and the ensuing aftermath, while networks like Scripps also posted big gains as others tried to escape the election coverage,” said Fennessy

SMI gets its ad revenue data directly from the billing computers at media buying agencies representing 70% of U.S. ad spending.

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