SMI: TV Ad Spending Rose 5.5% in December

Biggest gains in news and sports, NFL up 1% despite ratings drop this season
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Advertising spending on TV rose 5.5% in December, closing the books on a year in which TV ad dollars finished up 4.4% despite a well-publicized drop in NFL football ratings, according to new figures from research firm Standard Media Index.

TV’s take was boosted in the fourth quarter by several big advertisers who had shifted ad dollars to digital, including retailers, spending heavily on TV during the holiday season. Spending growth on digital ads dipped below double digits in the quarter to just 7.1%, SMI said.

During the 2016 season, spending on all NFL games on all networks except NFL Network was up just 1% because while prices went up, the networks had to provide advertisers with more make-good ads because of lower ratings, SMI said. Because it went from having all of Thursday night football to sharing the games with NBC and NFL Network, CBS’ football revenues were down 43% (its costs dropped too).

Prices for commercials in NFL games were up 6% to $499,095. Spots on NBC’s Sunday Night Football rose to 6% to $614,972, leading all networks.

In December, spending on broadcast was up 1% while cable climbed 9%. NBC, which added Thursday Night Football, was up 16.6%, while CBS was down 11.3% as it aired one fewer NFL contest. Fox was up 1.3%, while ABC was down 13.4%. ABC’s primetime was hurt by the delay of the new season of Scandal.

For the fourth quarter, broadcast was down 2.2%, with NBC rising 7.3% and Fox up 2.9%, while CBS slid 12.4% and ABC dropped 9.6%.

For all of 2016, broadcast was up 4.6% and cable grew 4%, with sports—including the Olympics—a big driver. Excluding sports, broadcast was down 2.4%, while cable rose 3.9%.

With the Rio games and more NFL games, NBC was up 20% for the year. CBS, with Super Bowl 50 in February, was up 3.2%. ABC was down 2.2% and Fox fell 4.6%.

Among the top cable networks, ESPN was down 2.9%, TBS rose 1%, TNT fell 1%, and USA Network declined 2.8%.

Cable news networks registered huge gains, with CNN jumping 57.8% and Fox News rising 25.7%.

Cable lifestyle networks were also winners with HGTV up 13.8%, Bravo up 14% and Food Network up 4.9%.

By category, sports was up 16% during 2016, thanks to the Rio games, while a wild election season boosted news 14.1%. Advertising on entertainment programming was down 1.8%.

“The big story in Q4 was the move back to television for some big categories of advertisers who had pushed the experimentation with digital a little too far. Retailers flooded back into TV over the holidays which helped make up for some softness in the early part of the football season,” said James Fennessy, SMI’s CEO. “The Olympics, a crazy election cycle, concerns around digital’s effectiveness and the power of live sports to draw big audiences and associated dollars have been the stories in the 2nd half of the year and have driven the results we are seeing in this year-end snapshot.”

Among the major advertisers increasing their TV spending were Paramount Pictures, which cut TV spending in 2015 but was up 24% in 2016. Also retailer Target boosted spending by 12% in 2016 after a 20% cut in 2015. Viewers saw more of Flo as Progressive Insurance increased TV spending 6.2% in 2016 after a 5.5% cut in 2015.

Overall ad spending in all media was up 0.7% in December, which contributed to a 4.3% increase for the fourth quarter and a 6.8% gain for all of 2016.

SMI said that digital ad spending growth, which had been growing at a 26% rate for 2014 and 2015, slowed in 2016. For the year, digital was up 13.3%, but in the fourth quarter it was just 7.1%. Facebook and Google accounted for most of the digital gains, with Facebook alone up 83% for the year. Another winner was Snapchat, up 356% and nearly double the spending Pinterest garnered.

For the fourth quarter, magazines were down 7.2%, newspapers were off 19.9% and radio dipped 1%. For 2016, magazines slid 9.1%, newspapers were 13.9% lower and radio edged down 0.5%.

Out of home was up 8.9% in the fourth quarter and 6.9% for the year.

Standard Media Index gets its ad spending data from the traffic computers at media agencies representing 70% of national buying.

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