Broadcasters, Cablers Lessen Ad Reliance, Push OOH, Publishing Dollars
CBS Corp.’s efforts to reduce its reliance on advertising dollars should bring a drop to below 60% this year, according to a new report. Nomura says 58.1% of 2013 company revenues should be
from ad dollars, down from nearly 64% in 2010.
Still, in a Nomura ranking, CBS is predicted to count on advertising to drive its business more than just one other company, Scripps Networks, which is forecast to be at 66.9%. Discovery is predicted to be at 48.2% -- high for a company with a healthy affiliate fee base.
Viacom follows at 34.6%, leading News Corp. at 31.4%, Time Warner at 21.3% and Disney at 18.7%.
Over time, the restructuring of CBS’ out-of-home division and Time Warner’s spinoff of its publishing unit should further reduce both companies’ ad reliance, Nomura indicates.
Separately, Nomura says online advertising could be ushering in CPM deflation, which could be leading to an overall drop in the ad market. Last year, online advertising in North America accounted for 22% of all ad dollars and the figure is predicted to increase to 28% in 2016.
Reasons for the online ad market causing the deflation include: increase in supply, lately due to Facebook and social media; growth in ad networks and exchanges; audience fragmentation online; dollars moving to mobile platforms, where CPMs are lower. Nomura says with CPM deflation, advertisers are able to “in effect” reach targets with “less” and “sometimes even no” budget increases.