U.S. Media Spend Up 7% In 2016, Digital Best Performer

• by Wayne Friedman, 6 hours ago

U.S. ad spending slowed toward the end of 2016 -- especially in the last month.

December was virtually flat, with a 0.7% increase over December 2015, according to Standard Media Index estimates. For the year as a whole, 2016 was up 6.8% over the 2015. The last three months of the year witnessed a 4.3% rise over the same period in 2015.

While digital media was again the star performer among all media categories, it was only up 13.3% for the year. In 2015, it was 50% higher over 2014. When taking out the two biggest digital media platforms -- Facebook and Google  -- from the digital media category, the sector’s growth dropped to a gain of 8.7%.

In particular, digital media suffered in the fourth quarter, rising only 7.1%. Retail and telecommunications marketers cut back digital media, as retail digital spending dropped 3.5% and telco digital spending was cut down by 2.4%.

Where did those media dollars go? Back to TV.

James Fennessy, CEO of SMI, stated: “Retail, telcos, and consumer electronics [marketers] have not seen the outcomes they expected from digital and have moved back to the medium they have trusted for decades.”

TV spending had a 4.4% increase in 2016 -- 4.6% higher for broadcast TV and 4% for cable TV. Ad spending on TV entertainment programming slipped 1.8%, with sports 16% higher, in large part due to the Olympics. Ad spending on news programming -- due to the presidential election -- improved 14.1%

Among the broadcast networks, NBC was up 20% for the year (a large part being the Olympics); CBS added 3.2%; ABC sinking 2.2%; Fox falling 4.6%; and Univision declining 3.4%.

For the entire year in 2016, magazines were down 9.1%, with newspapers giving back 13.9% and radio virtually unchanged -- down 0.5%. Out-of-home advertising grew 6.9%.