Suddenly, TV spending looks stronger

Medialife

Boost in scatter spending lifts TV out of recent doldrums

 

By Bill Cromwell

April 21, 2015

 

Retail ad spending surged to end the quarter.

Maybe the upfront won’t be quite as lackluster as buyers and analysts are forecasting.
A 46 percent surge in scatter spending during March boosted TV ad spending in first quarter.
If that demand continues, buyers may be more inclined to lock in pricing during the upfront, when most of the ad time for the coming season is sold, rather than risk paying more for ads bought in the scatter market, when the remainder of the time is auctioned off.

According to Standard Media Index, which tracks ad spending for 80 percent of U.S. agencies, first quarter broadcast spending rose 7 percent year over year, when removing dollars from last year’s Winter Olympics.

It found cable too was up versus last year, growing 4 percent when removing Winter Games spending.

“A nice uptick in scatter dollars fueled national TV growth in March, which is certainly a good sign for the health of the ad marketplace,” says Scott Grunther, executive vice president of media at SMI.
A rebound for retail, one of the biggest spending categories for television, helped fuel the growth for TV ad spending.

Retail spending grew 17 percent in March, following declines in January and February.
Retailers cut back after struggling to lure shoppers into stores during the terrible weather that plagued the East Coast during the start of the year.

But in March, those shoppers came back. Consumer spending was up 0.9 percent in March,
Overall, ad spending rose 1 percent in first quarter, SMI says, with TV capturing 46 percent of that spending.

Digital spending surged by 23 percent, more than any other medium, with social networking sites up 41 percent and video sites such as YouTube and Hulu up 38 percent.

As usual, traditional media struggled. Though out of home was up 1 percent in first quarter, print and radio saw declines.
Radio was down only 1 percent, but newspapers dropped 2 percent and magazines were off the most, 7 percent.

Those categories were hurt in part by the slowdown in first quarter auto advertising. Auto decreased by 3 percent, though buyers say some of that may be because dollars are being moved into cheaper media, such as digital.

The fastest-growing advertising categories in first quarter were consumer electronics and business services and recruitment, which both rose 17 percent.