Walking Dead: Broadcast Bites Into Network Ad Erosion, AMC Leads Cable's Momentum

by Joe Mandese @mp_joemandese, April 19, 2013

Madison Avenue’s media market shares continue to restructure. While television still represents the majority of media bought by major agency holding companies, “digital” now accounts for 25 cents of every ad dollar spent. The data, which is the first of its kind to be released publicly, was compiled directly from the data processing systems used by four of the Big 6 holding companies -- Aegis, Havas, Interpublic and Publicis -- by Standard Media Index, and represents the most accurate view of actual media spending by big agencies.

It shows that a relative slowdown in TV advertising growth is reducing the medium’s share, ad digital -- mainly online display and search -- continues to expand. As of March, digital’s share of media buys processed by major agencies was 24.6%, while television declined to 60.3%. The share shift reflects the fact that TV ad spending fell 5%, while digital rose 15% year-over-year.

While March represents the most pronounced share shift to date, the trends over the past two quarters show similar patterns.

“Television spend continues to slow -- at a rate of -2% during the first quarter of 2013 -- driven by March’s year-over-year decline of 5%,”explains SMI analyst Kristina Luland.

The data indicates that most of television’s erosion occurred among the broadcast networks, which saw ad spending fall 6.2% during the first quarter to a 24.1% share of media buys by big agencies.

Cable network spending rose 1% during the quarter and how accounts for a greater share -- 25.6% -- of agency budgets than the major broadcast networks. It’s not clear whether that’s an industry first, because the SMI data is relatively new to the marketplace.

While cable’s growth is across-the-board, ultra hot networks -- especially AMC -- are leading the pack. According to SMI, the top 10 cable network owners account for 91% of cable network buys, and AMC let the top 10 with a 25% share, driven by a 45% growth rate during the first quarter, no doubt due in part to the breakout success of shows like “The Walking Dead.”

The bigger story, of course, is digital’s continued ascendancy. Fueled by double digit growth in every sub-segment, overall digital spending rose 17% during the first quarter to 23.5% of agency media buys.

While mobile (+92%) and exchange-based digital buys (+46%) were the fastest growing sectors, display (+12%) and search (+12%) still account for dominant shares of digital spending. During the first quarter, direct-from-publisher display advertising accounted for 8.6%, and search accounted for 6.2% of all buys made by the major agencies.

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