Is Local TV Digital Growing Too Slowly?

Growing digital revenues are a nice bonus for broadcast stations. But are they growing fast enough?

Borrell Associates estimates that local TV-related digital advertising sales will get to $2.9 billion this year -- about 6.5% of all local TV revenue. Borrell notes that some TV companies see as little as 3% of their ad revenues from digital, others as high as 8%.

But Borrell notes how well stations “could be doing.”

Local TV-related digital advertising sales will rise a modest 7.4% this year. down from a 14.9% gain in 2013.

This might sound reasonable in comparison to overall TV revenues. BIA/Kelsey says traditional station advertising will be $19.9 billion in 2014 – an 8.2% gain from $18.4 billion in 2013 - mostly due to political and Olympic revenue.

Stations may have a lot of work to do. Overall local digital advertising - will climb 42.5% this year to $35.2 billion.  Newspaper and directories -- though under more pressure than other media -- already glean twice TV stations’ share of digital advertising dollars, or around 12% to 13%.



But there’s good news for digital platforms that are heavy into video content. Much more than on other digital ad platforms, marketers are willing to pay premium pricing for big, impactful video content.

Borrell points out that video CPMs are still well above display advertising, averaging $23.70 -- down a small 5% from $25.03 in 2013.

The problem is how to garner new business going forward, with the digital marketplace overcrowded and fragmented.

No matter. Borrell believes stations need to be much more aggressive to make digital 25% or more of their total revenue within five years.

That would be a rapid rise. But we agree that stations need to get close to these goals -- and fast. They have their work cut out for them.

1 comment about "Is Local TV Digital Growing Too Slowly?".
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  1. J Neighbors from II media , August 7, 2014 at 4 p.m.

    The cheap seats and squishy mgt is usually assigned to overses front line sales mgt. And if they're squishy, the revenue effort is even squishier. nbc O&O's and TribuneTV in particular.

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