TV Ad Spending Rose 3.3% in Second Quarter - Broadcasting & Cable

TV Ad Spending Rose 3.3% in Second Quarter

New data from SMI show cost of spots in prime on broadcast down 5%
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Spending on national television advertising rose 3.3% in the second quarter from a year ago, according to new figures from research company Standard Media Index.

In addition to its spending data, SMI now is reporting information on how much individual ad units cost, based on the data it gathers from the computer systems of media buying agencies representing about 70% of U.S. media spending.

SMI says that on broadcast, 30 seconds of ad time costs $114,100, down 5% from a year ago. Spots on Wednesday night were up 21%, probably because of the performance of Fox’s hit Empire, which just finished its second season.

Broadcast ads in the morning were down 4% to $32,500 on average, while late fringe spots were down 10% to $26,400, SMI said.

On cable, the average unit in prime was up 10% to $8,370, with the biggest growth on Sunday night, home of AMC’s The Walking Dead among other original programs.

Cable spots in daytime rose 8% to $1,413.

SMI also has data on how many makegood spots the networks have to give advertisers when they underdeliver the ratings they guarantee to advertisers.

On broadcast, primetime audience deficiency units—as makegood spots are called—fell slightly to 15% of inventory from 16%. In the morning, they fell to 13% from 16%, but in late fringe, they rose to 22% from 15%.

On cable, ADUs in prime dropped from 19% to 12%, and ADUs in daytime fell to 11% from 18%.

SMI's data show that overall spending on broadcast was down 2.5% in the quarter, while spending on cable rose 6.5%.

“This new market data clearly shows the end of the recent digital growth spurt, and that many of the dollars returning to television are first going to the lower CPM cable sector, as broadcasters need to more fully document their ROI advantages to offset these CPM differences," James Fennessy, SMI’s CEO, said.

"Cable capitalized on higher ratings with a number of big sporting events coupled with the success the news channels are enjoying through this election cycle," Fennessy said.

"We believe these are very strong results given the networks true audience numbers are being seriously undercounted by Nielsen. We see an enormous temporary opportunity to buy high ROI television at great prices before Nielsen [Total Audience Measurement] becomes a reality," he said.

(Photo via Money-401(K) 2012's Flickr. Image taken on June, 27, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

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