TV Ad Market Forecast To Wane Post-Olympics

Looks like most TV managers may have a hard and slow time recovering from political and working hard to get back those local clients who were abandoned during the political run-up to the election. Yes, managers have told me their clients understand political advertising times...but local-direct clients need to stay alive in their markets else all TV managers will have left for inventory one day is another political run-up and Olympics and perhaps escaping to alternative ad channel choices. Philip Jay LeNoble, Ph.D. CA

• by Wayne Friedman, Yesterday, 6:10 PM                                                                   

Will TV advertising slow in the second half of the year? Bernstein Research says TV advertising will weaken after big ad spending following NBC’s Rio Summer Olympics in early August.

 

“We face increasingly tougher revenue comps, generally,” says Todd Juenger, senior media analyst for Bernstein Research. Generally, there will be more difficult advertising comparisons to the strong second half of 2015, when the TV scatter market started to perk up. 

 

Juenger says: “The Olympics will suck audiences and ad dollars away from everybody except NBCU...[And] we will begin lapping all those Daily Fantasy Sports dollars.”

 

Juenger says that despite estimates of a strong TV upfront marketplace, this activity will be muted, as longer-term TV audience guarantees are changing. 

 

"While we believe agencies will put more money on the table at the upfronts, we believe they will only be willing to spend it on realistic audience guarantees. The guarantees from the past few years have been way too high."

 

"So while the reports coming out of the upfronts will be about increasing CPMs [cost per thousand viewers], ultimately, revenue is a function of price times quantity and we believe quantity has to come down."

 

In addition, he says TV audiences will continue to fall and digital platforms will continue to get bigger and better. The first months of 2016 showed TV spending up around 3% to 4%, depending against the same time period a year. 

 

Recently, senior media executives, such as David Cohen, president of IPG’s Mediabrands’ Magna Global, have said that TV spending -- for the 2016 year as a whole -- will be flat to only slightly up versus a year ago.