Standard Media Index (SMI), a source of ad pricing and revenue data, announced that the US advertising marketplace grew 7 per cent in October year-over-year (YoY). Looking across platforms, Digital was the strongest performer this month, growing 17 per cent. That was followed by Out-of-Home (OOH) at 10 per cent, Radio at 7 per cent, Television flat, and Print at -27 per cent.
National Television was flat in October with Broadcast down -7 per cent and Cable up 5 per cent. Broadcast revenue tumbled as NFL games dropped the ball this year. Broadcast networks did trend positively in News and in Primetime Original Entertainment verticals. Additionally, Broadcast networks increased their amount of 30-second commercial spots by 5 per cent YoY. Among those, the per centage of spots that were unpaid – also known as makegoods or ADUs – fell by six per centage points. Nevertheless, these adjustments weren’t enough to make up for the losses in NFL revenue.
Meanwhile, Cable networks increased revenue by 5 per cent YoY, even as commercial spots remained flat. Cable News has held steadfast for the year, and it remained the fastest-growing vertical this month.
The Upfront market grew 2 per cent in October. Meanwhile, the Scatter market fell -4 per cent year-over-year as marketers moved to Upfront buys to avoid Scatter premiums.
“The linear television season has started sluggishly as expectations of robust demand haven’t yet materialised in the market,” said James Fennessy, CEO of Standard Media Index. “Demand from marketers continues to outpace audience erosion even if that is due to more limited digital video advertising options due to ad-free delivery.”
Primetime Original Programming revenue increased 3 per cent YoY in October, as the 2018-19 season began to heat up. SMI defines original programming as non-syndicated, new episodes for comedy, drama, and reality subgenres. Among primetime originals, dramas grew the most in October at 7 per cent YoY. Several freshman dramas were among the highest grossing this month, namely ABC’s A Million Little Things, FOX’s 9-1-1, and NBC’s Manifest and New Amsterdam.
When including the last week in September, during which many shows began the season, the average price for a 30-second commercial spot during a primetime original entertainment programme remained flat from last year. It’s noteworthy, however, that the average price paid during regular season episodes rose 6 per cent, while the average prices during premiere episodes fell -1 per cent. Still, advertisers paid an average premium of 158 per cent to advertise during a season premiere.
Looking at market share for all Entertainment programming except Kids, Comcast Corp. was the largest TV network group by Entertainment revenue in October at 18 per cent. That’s followed by Discovery at 14 per cent, Viacom at 11 per cent, The Walt Disney Co. at 10 per cent, CBS Corp. at 8 per cent, Time Warner at 8 per cent, 21st Century FOX at 6 per cent, A&E Television Networks at 5 per cent, and AMC Networks at 4 per cent. It’s a highly consolidated market where the top eight media owners account for 86 per cent of Entertainment ad revenue. The top 12 media owners account for 94 per cent of ad revenue.
Cable News continued to be National TV’s leading genre in ad revenue in October. The six cable news networks – FOX News, CNN, MSNBC, CNBC, HLN, and FOX Business – grew a combined 14 per cent YoY during the month. Among the networks, MSNBC was the top performer, growing 30 per cent YoY.
Additionally, Broadcast News was positive in October, rising 2 per cent. ABC grew the most among English-language networks, rising 13 per cent YoY. On the Spanish-language side, Univision and Telemundo increased ad revenue in their News divisions by 25 per cent and 31 per cent respectively.
October was a tough month for live sporting events, as the NFL fumbled its television revenue. Part of the decline resulted from 27 games in October this year compared to 31 games this month last year. Combining September and October, the NFL aired 51 games in both 2017 and 2018. In the two-month period, NFL revenue fell -19 per cent, as the number of 30-second commercial spots fell -6 per cent.
“The effects of the lower audiences last year are spilling into this season, as NFL revenue is down,” said Fennessy. “Nevertheless, as the market reports improving viewership, we will see how these trends change over the remaining months of the season.”
On the other hand, the 2018 World Series hit it out of the park. The series, which aired on FOX, increased paid unit rates by 15 per cent YoY. Altogether, FOX caught $121.6 Million in ad revenue. With 5 games this year, compared to 7 games in 2017, the average revenue per game was up 27 per cent.
Advertisers by Category
Across National TV, the Auto industry spent the most on advertising this month, although that spend is down -9 per cent YoY. Rounding out the top five were: Entertainment (-7 per cent), Prescription Drugs (1 per cent), Insurance (9 per cent), and Quick Serve Restaurants (-3 per cent).Looking at advertiser categories across all platforms – including TV, Digital, Radio, Out-of-Home, and Print – Autos remain the largest spender of the month, although only decreasing -1 per cent YoY. That is followed by Telecom (-3 per cent), Prescription Drugs (14 per cent), Insurance (1 per cent), and QSR (12 per cent).