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TV Ad Spending Fell 5.8% in September - Broadcasting & Cable

TV Ad Spending Fell 5.8% in September

Big 4 primetime spots cost down 8%, SMI says
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Spending on TV advertising fell 5.8% in September, according to new figures from research company Standard Media Index.

Broadcast spending was down 13%, a drop SMI ascribes to the lack of spending by fantasy football sites FanDuel and DraftKings, which spent $100 million more in Sept. 2015 than this year.

Cable networks were up 0.7%.

Primetime TV revenue fell 16%. The average unit cost for the Big 4 broadcast network during prime cost $86,000, down 7.6% from $92,300 in 2015.

Some of the September spending drop was money shifted to the Olympics.

September spending originated in the 2015-16 upfront was down 25% from the prior year. Scatter spending was up 32%.

Ad revenue winners included NBC’s The Voice and This Is Us on Monday and Tuesday. On Wednesday Fox and ABC tied in terms of ad revenue, with Fox airing its hit Empire and ABC broadcasting its comedy lineup highlighted by Modern Family.

Thursday was a winner for CBS with Thursday Night Football. NBC is the winner on Sunday with the NFL. Among scripted programming ABC dominates on Sundays.

While NFL ratings are down, the price of spots during games averaged $509,193 across all networks, up 8% from a year ago. For Fox and CBS Sunday games, spot prices were up 11%. Sunday Night Football on NBC cost 9% more. CBS’ Thursday Night Football spots were flat. Ad rates on ESPN were down by about 4%, SMI said.

The lower ratings might mean the networks have to provide additional, free make-good ads to clients.

ESPN had the most ad volume among cable networks but was down 10%. Spots on ESPN cost 4.5% less than a year ago.

The cable news network all saw revenues rise. Spot prices were up by double digits amid coverage of the Presidential election.

“Our new cost level data clearly shows that while ratings on football have been under pressure early in the season, average unit costs continue to increase. This demonstrates that live sport and the huge audiences it attracts are an outstanding drawcard for major brands. On the flip side, primetime and late night programming doesn’t provide the same pull. Poor ratings are directly linked to falls in revenue and average unit cost declines,” said James Fennessy, CEO of SMI.

Digital ad spending was up 14% in September. Social sites were up 44%, and video sites rose 30%.

“While some of September’s falls can be attributed to a post Olympics hangover, evidence shows the biggest contributor to broadcast’s significant fall was driven by the fantasy leagues spend almost completely drying up under the numerous legal actions they face. Cable’s gains are directly related to the terrific results delivered by the news networks, which we fully expect to continue through the November election cycle,” he said.

For the third quarter, which includes the Olympics, TV ad spending was up 9.3%, with broadcast up 18.1%. NBC posted a 117% gain in ad revenue for the quarter.

Cable was up 3.7% in the quarter, compared to a year ago.

For the quarter, digital was up 15%, with social sites up 50%, video sites up 30%, and TV network digital sites up 24%.

SMI gets data from the traffic computers at media agencies representing 70% of total spending. SMI has created models to estimate the remaining 30%.

Correction: SMI recalculated the price of spots in ESPN's Monday Night Football, which also resulted in a change in the average unit cost for NFL games across all networks.

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