Digital Up, TV Dips In Q4 Media Spend

by Wayne Friedman , January 21, 2015

A marked slowdown in the last quarter of 2014 occurred in the U.S. advertising market.

Standard Media Index says the market was flat in the fourth quarter of 2014 versus the same period in 2013. Only digital media spending witnessed a rise, up 15% versus the same time period a year ago to $7.6 billion.

More traditional TV media moved in the other direction. National broadcast TV spending was down 2% to $4.8 billion, and cable TV gave up 1.6% to $6.8 billion during the period.

Specifically, NBC was up 3% -- now with 27% share of advertising dollars -- while CBS grew 2%. NBCUniversal’s Hispanic network Telemundo had the best growth of broadcast networks -- 5%. Heading in the other direction in Q4, Fox declined 12%; Univision was off 6%; and ABC lost 2%.

In cable, ESPN grew 3%; NFL Networks climbed 61%; AMC Networks, added 28%; and Viacom was up 2%.

Although the market was flat in the last three months of the year, 2014 overall witnessed a 6% hike due to digital media such as mobile, video and programmatic revenues. For the year, cable TV spending grew 5.1% to $26.4 billion; digital spending (without search) was up 19.9% to $24.4 billion; and national broadcast climbed 4.1% to $16.5 billion.

SMI notes that without the Olympics, broadcast would have been down by 2% for the full year. In 2013, broadcast only grew 1.5% over 2012.

Looking at specific digital gains in the fourth quarter, programmatic was up 71%; mobile, 17%; display, 12%; search, 12%; and video added 11%· Also, NBC.com was up a big 104% and ESPN 70% in digital ad dollars during the period.

Print witnessed lower results: magazines were down 8% and newspapers dropped 3% in the past quarter.

SMI data come from 80% of total U.S. agency spending exclusively from the booking systems of five of the six global media holding groups, as well as leading independents. It reports monthly on actual spend data.

ad spending, cross-platform, media, media buying, mobile, programmatic, tv, video

9 comments about "Digital Up, TV Dips In Q4 Media Spend".

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Leonard Zachary from T___n__, January 21, 2015 at 1:23 p.m.
Brian Weisner over at Pivotal says this is cyclical not secular. I am still trying to reconcile this with the younger audience participation which seems to be secular not cyclical.
Reply

Ed Papazian from Media Dynamics Inc, January 21, 2015 at 2:28 p.m.

Leonard, I would think that Brian is referring to TV's total audience, not merely the 25% that is represented by the 18-34s. Unless the heavy viewer segment---mostly people over 50---starts defecting in huge numbers, their consumption largely offsets losses in tonnage by light viewing 18-34s.

Ed Papazian from Media Dynamics Inc, January 21, 2015 at 3:31 p.m.

Just to clarify my previous comments, the 18-34s represent, perhaps 20-25% of TV's total viewing tonnage and the fact that an increasing percentage----though by no means the majority-----of this group's viewing time is going to alternative platforms, does not mean that "linear TV" is dying. Relatively few TV ad buys are based on 18-34 targeting----perhaps 5%, is a good estimate. The overwhelming majority of buys use 18-49 or 25-54 while some pharmaceutical brands employ the even broader 35+ "demo" as their target. So, unless the 35-65s join in the massive defection to alternate platforms, 'linear" TV's total ad revenue base, is not seriously threatened. Slower growth and, in some years, no growth, for sure, but not the ongoing and ever steeper declines that are anticipated by some. I think that that's what Brian is saying.

Leonard Zachary from T___n__, January 22, 2015 at 9:04 a.m.

"So, unless the 35-65s join in the massive defection to alternate platforms, 'linear" TV's total ad revenue base, is not seriously threatened."

Ed your analysis is alarming considering its the younger demographics keeps the 35-65s base going for the future. It is not clear how that 35-65s base will grow if secular habits are being ingrained in the younger audience base and further, advertiser and agency habits are being ingrained in digital addressing the younger audience. That 65 year old ad exec was comfortable with the big TV spend but not the up and coming 30 year old exec who grew up with the Internet not TV. This is looking like a non renewable credit card with a firm expiration date.

Ed Papazian from Media Dynamics Inc, January 22, 2015 at 9:27 a.m.

Don't be alarmed, Leonard. There is no doubt that the younger generation is always the first to adopt new technologies and, in this case, new platforms. Where we differ is the extent to which we think that the 18-34s will desert 'linear TV" in terms of total viewing time---or tonnage. We also appear to disagree on the lasting effects of platform shifts as the 18-34s of today age and become older consumers. Of course, they will take their new platform preferences with them as they age---but not to the extent that was evident when they were younger. As we grow older, we tend to seek convenience and ease to a greater extent than in our early years. Accordingly, watching "linear TV" on conventional TV sets in our homes will increase proportionately among today's 18-34-year-olds as they hit the 45 and 50 year mark and even more so, later. So, if you take into account both the aging effect and the relative scope of alternative platform usage in terms of volumetrics, there is little doubt in my mind that commercial TV, as we know it today, will still dominate branding advertising spending and audience delivery for many years to come.

Chuck Dunning from XETV-TV, January 22, 2015 at 2:13 p.m.

Believe me, I would like to think Ed is right and the 35-64s of the future will consume broadcast TV like the ones today. I'm not sure though. When I was in my 20s I listened to rock radio on FM. The older generation listened to Beautiful Music on FM or All News on AM. Today ( with me now in the 35-64 crowd) it's still rock (now called "classic") but on Sirius. And Beautiful Music and All-News are pretty much gone. If the 18-34s like the ease and convenience of their phones or tablets today, why will those be less easy or convenient as they age? Please tell me I'm wrong, but I think we have to take our content to them as I'm not sure they'll care to come to us.

Chuck Dunning from XETV-TV, January 22, 2015 at 2:15 p.m.

One more thought. In my 20s I wore Levis and my dad wore Sansabelts. 30 years later I still wear Levis and I couldn't tell you where to buy Sansabelts.

Ed Papazian from Media Dynamics Inc, January 22, 2015 at 3:07 p.m.

Chuck, I'm not saying that there won't be any change in the way people over the age of 35 consume TV five or ten years from now. That wouldn't make sense considering all of the new "platforms" that are emerging and their enthusiastic adoption by certain segments----mainly younger adults and, probably, some teens. I'm questioning the assumption that "linear TV" is doomed to virtual extinction, along with all of the billions of ad dollars that are spent on it----because the new platforms will take away practically all of its viewers. That's what some of the more enthusiastic "digital rules the world" types are preaching---or seem to be saying---- as they seize upon every news report that appears to support their forecast as proof that "legacy media's" sky is falling. It's all a matter of degree and the odds are that five or ten years from now, things will have changed, somewhat, in all age sectors, but TV, more or less as we know it now, will probably be chugging along, drawing the bulk of all viewing tonnage---time spent---as well as most of the branding ad dollars. This is not the first time we've been through the TV is dying scenario. Go back to the widely heralded New Electronic Media ( NEM ) "revolution" and, specifically, the introduction of cable, around 1980-82. Then, as now, the pundits and gurus were having a field day. One of the major ad agencies claimed, without reservation, that ABC, CBS and NBC, would be out of the TV picture by 1990; another contended that because cable was like magazines---apparently referring to cable's promise of more selective program fare-----it would command CPMs that were double what the "mass programmed" broadcast networks received. Both predictions were completely wrong. I happen to think that there is more substance to the current digital expansion than the NEM "revolution" of the early 1980s but before digital grabs its hands on TV's branding ad budgets, which it understandably covets, it had better get its own house in order. Ultimately, I expect that the two ----"linear TV"and digital--- will blend together in a symbiotic and/or complimentary relationship based on what makes the most sense to the media, the advertisers and the consumers, regardless of what we have to say.

Kristian Magel from Initiative, January 23, 2015 at 8:50 a.m.

Well said, Ed. This is what we're most likely looking at in 5-10 yrs:
--- On demand viewing grows to a very large share of, or overtakes, live viewing for most entertainment, series-related content.
--- Live becomes more of a news, talk, sports, and event medium. Still very valuable. Still a lot of viewing. Particularky events who will offer immediacy and scale that won't be easily available in a single day anywhere.
--- Some TV companies embrace and distribute their content across all distribution points, and all screens, and adapt to a la carte distribution.
--- Some don't, and go away.
--- Netflix, Amazon, Hulu and other new world programmer/distributors become formidable players and migrate to the subscription + advertising model (Hulu already has, Amazon's experimenting, Netflix will see the light - or need it for continued growth - someday).
--- Cross platform currency and measurement is almost here already
--- On-demand advertising will be more addressable and dynamic, and offer greater effectiveness for advertisers than almost any other medium (barring search and paid social, some mobile)
--- It'll likely all be called "TV" or "Video" - and will be very healthy.
--- And consumers win, no matter what age, since the content coming out of these new world players is fantastic.