The State of Cable Advertising in 2010

by Marc Krigsman, Larry Rubin, May 25, 2010, 2:48 PM

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Even in the face of a continued sluggish economy and tentative consumer spending, cable advertising is experiencing good year-over-year improvement. According to Nielsen's "2009 Television Audience Report," national cable network ad spending rose 16% to $19.1 billion in 2009, while a recent J.P. Morgan survey maintains that 74% of those who buy ad spots are already spending more this year than in 2009.

Why Cable?

This trend should not come as a surprise to anybody familiar with the cable medium. Cable provides advertisers with both a tried-and-tested method for reaching their customers and a variety of niche channels that target specific demographics in a highly efficient manner.

Most importantly, cable's audience continues to grow. Nielsen data from 2009 shows that cable's prime-time household share for the year averaged 60.7 for the first time -- up 2% over 2008. In addition, since 2000, cable's share has increased every year. By contrast, broadcast network's 2009 share was down 2% since 2008.

What's Working, What's Not

There are understandably some areas that are lagging behind the trend. For example, due to a lack of new products and continued caution in consumer spending, direct-response advertising is not experiencing as significant an improvement as brand.

However, 2010 is a midterm election year, so political ad spending on cable media is heavy -- and will only get heavier as the November election approaches. According to a Wells Fargo Securities report released toward the end of 2009, political advertising in all media will hit $3.3 billion in 2010, fueled in part by the election of the entire House of Representatives -- 38 senators and 37 governors.

Alternative Platforms

Despite the increased visibility of such alternative platforms as VOD, mobile and the Internet, they are not impacting cable TV ad spending. While advertisers are testing these platforms, they are not reducing their cable TV budgets to do so.

Traditional television media continues to dominate and provide a reliable and audience-accepted advertising channel. Consumers find TV ads more persuasive, influential and engaging than ads in competitive media. Furthermore, television reaches more consumers per day -- for more time -- than newspapers, magazines, radio, the Internet and mobile media.

Tied To The Economy

The bottom line is that cable spending has historically been tied to the health of the overall economy; if the economy is in a slump, so is cable advertising. As the economy slowly improves, we are seeing this maxim applied, with advertisers cautiously optimistic and marketing budgets becoming larger and more readily available.

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0 comments on "The State of Cable Advertising in 2010".

1. Gian Fulgoni from comScore
   

   commented on: May 26, 2010 at 8:15 a.m.

   A 16% growth in national cable TV ad spending in 2009? Sounds hard to believe in light of the 9% decline in total ad spending reported by Nielsen! Even Kantar Media reports a 1.2% decline in cable ad spending in 2009

2. Ronny Le blanc from Mixpo.com
   

   commented on: May 26, 2010 at 8:38 a.m.

   I would have to believe that they are taking some of their budget to test out some of the newer platforms out there. What about the reporting and targeting benefits of online and mobile?

3. Michael West from MediaDynamics
   

   commented on: May 26, 2010 at 10:15 a.m.

   I thought so too on the 16% growth so I Googled it and found this from Nielsen that confirms that number.

   http://blog.nielsen.com/nielsenwire/wp-content/uploads/2010/04/TVA_2009-for-Wire.pdf

4. Paula Lynn from Who Else Unlimited
   

   commented on: May 26, 2010 at 10:45 a.m.

   Has anybody noticed programming changes in cable over the last few years? They are not all reruns. USA, TNT, AMC, FX have some of the best programs with standard viewers and oversight that people watch programs, not stations seems to have been oversighted in this article.

5. Gian Fulgoni from comScore
   

   commented on: May 26, 2010 at 2:16 p.m.

   Michael: While Nielsen may say cable ad spending grew by 16% in 2009, Kantar claims it actually fell by 1.4%:

   http://www.kantarmediana.com/news/03172010.htm

6. Juliette Cowall from Godwin Plumbing & Hardware
   

   commented on: May 27, 2010 at 10:01 a.m.

   I'm skeptical of the numbers also. As a viewer, I've noticed that an ad will start and, within the first few seconds, another ad will start over it. The first one never airs completely. Initially, I thought it was poor traffic, but it happens quite frequently. As a confirmed cynic (and media buyer), I've been wondering whether both advertisers are getting charged, which means the cable stations are overselling inventory. That might explain a 16% growth.

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