US ad market gains 10% in July
August 28, 2018
Standard Media Index, the only advertising intelligence firm to source detailed and complete data directly from the major agency holding groups, unveiled national advertising revenue figures for July 2018. The National Advertising market gained 10 per cent YoY, when factoring out the World Cup.
Looking across platforms, Digital was the strongest performer this quarter, growing 17 per cent. That was followed by National TV at 3 per cent (excluding the World Cup), Out-of-Home at 1 per cent, Radio flat, and Print at -18 per cent
National Television Results
National Television increased in July, thanks to Cable programming, which rose 5 per cent YoY, while Broadcast fell -1 per cent, when excluding the World Cup from both.
The 3 per cent rise in revenue coincided with an 2 per cent increase in the number of 30-second spots. While paid unit costs dipped, that was offset by a -16 per cent reduction in the number of unpaid spots – also known as makegoods or ADUs.
“The decline in ADUs is a positive sign for the industry, indicating that programmes are delivering the expected audience figures this month,” said James Fennessy, CEO of Standard Media Index. “National TV declined in the previous three months (April – June), and it’s encouraging to see this trend reverse towards growth.”
In July, the Upfront market grew 5 per cent, while the Scatter market grew 1 per cent.
Entertainment Television revenue increased 3 per cent YoY in July with Primetime Original Programming up 8 per cent. MI defines original programming as non-syndicated, new episodes for comedy, drama, and reality subgenres. Three of the major broadcast networks gained revenue from Primetime Original Programming this month: NBC at 8 per cent, ABC at 18 per cent, and CBS at 21 per cent. FOX, which aired the World Cup Tournament through much of July, saw a decline in revenue from Primetime Originals that coincided with a decline in spots for this programming.
Two-thirds of the revenue from Primetime Originals in July was from the Reality subgrenre. Primetime Original Reality shows grew 3 per cent, as revenue from ABC’s “The Bachelorette” and NBC’s “America’s Got Talent” increased 35 per cent and 42 per cent respectively.
Looking at market share for all Entertainment programming except Kids, Comcast Corp. was the largest TV network group by Entertainment revenue in July at 19 per cent. That’s followed by Discovery, Inc (including Scripps Network Interactive, which it acquired in March) at 17 per cent, Viacom, Inc at 14 per cent, Time Warner, Inc at 11 per cent, CBS Corp. at 8 per cent, The Walt Disney Co. at 8 per cent, A&E Television Networks at 7 per cent, and 21st Century Fox at 5 per cent. It’s a highly consolidated market where the top eight media owners, all with at least 5 per cent market share, account for 88 per cent of ad revenue. The top 12 media owners account for 98 per cent of ad revenue.
Cable News continues to be a boon for National TV in July. The five cable news networks – FOX News, CNN, MSNBC, CNBC, and HLN – grew a combined 18 per cent YoY for the quarter. Among the networks, MSNBC has been a powerhouse, growing 44 per cent YoY. Nevertheless, FOX News continues to charge the highest prices for spots during new episodes
Meanwhile, Broadcast News was positive in July, marking the first month of YoY gains in 2018 for the genre. Combined, ABC, NBC, and CBS grew revenue from news programming by 8 per cent in July
Among TV Network Groups, Comcast has 35 per cent share in news, followed by 21st Century FOX at 16 per cent, The Walt Disney Co. at 16 per cent, Time Warner at 16 per cent, and CBS at 8 per cent.
Revenue from Sports increased 20 per cent in July YoY, although that is entirely due to the World Cup. When excluding the tournament, Sports revenue is down -6 per cent.
Looking at the full World Cup Tournament, which ran from June 14 to July 15, in-game revenue is down -29 per cent from the 2014 games. Breaking that down, the English-language version, which aired FOX and FS1, is down -18 per cent despite an 85 per cent increase in the number of 30-second spots. Meanwhile, the Spanish-language version, which aired on Telemundo, is down -36 per cent as the number of spots fell -26 per cent.
Among TV Network Groups, The Walt Disney Co. has 33 per cent share in sports, followed by Comcast at 33 per cent, 21st Century FOX at 23 per cent and CBS at 3 per cent.
Advertisers by Category
Across National TV, the Prescription Pharmaceutical industry spent the most on advertising this month, growing 26 per cent YoY. Rounding out the top five were: Auto (5 per cent), Food, Produce & Dairy (-10 per cent), Insurance (12 per cent), and Quick Serve Restaurants (19 per cent).
The retail industry was uncharacteristically spending on advertising in July. While July is considered “off-season” for retail, all three retail subcategories – department stores, specialty retailers, and other (online & convenience) retailers – overspent historical norms. This is a partial response to favorable economic conditions allowing retailers to open their open their wallets to attract more customers. Altogether, the combined retail category increased spend compared to last July by 16 per cent.
Looking at advertiser categories across all platforms – including TV, Digital, Radio, Out-of-Home, and Print – the top four categories increased spend compared to July last year. The Telecommunications industry was the largest spender in July, increasing 5 per cent year-over-year. That is followed by Auto (22 per cent), Prescription Pharmaceuticals (37 per cent), Quick Serve Restaurants (51 per cent), and Food, Produce & Dairy (-2 per cent).