What will networks do if two extremely lucrative ad categories — pharmaceuticals and fantasy sports — drop out of the ad game?
The American Medical Association just recommended that makers of direct-to-consumer prescription drugs stop advertising on TV. The AMA believe this marketing is driving up consumer retail prices for prescription drugs.
According to AMA data, ad dollars spent by drugmakers have risen 30% to $4.5 billion in the last two years, with consumers prices on prescription drugs gaining nearly 5% this year. The AMA will lobby for a ban on such advertising.
To be sure, the likelihood of this happening is slim. Other than unlikely massive Federal legislation and/or court decisions, TV advertising for prescription drugs will continue for sometime.
Also in the past week, the ad marketplace gained another worry: that fantasy sports ads might go away.
For many online “gambling” can, in fact, be harmful for one’s health -- financial health. Should more states follow New York (and Nevada, before) in calling daily fantasy sports sites “games of chance," not “games of skill," then TV advertising will surely take a hit.
Here there could be some traction: Todd Juenger, a media analyst at Sanford C. Bernstein & Co., wrote on Wednesday that almost 60% of the increase in national TV advertising sales in the third quarter -- or $134 million of total growth of $227 million -- came from daily fantasy sports companies. He warned this is “startling” and “unsustainable.”
At the same time, Standard Media Index says overall TV advertising -- somewhat shockingly -- gained 10% in October, its best month in nearly two years. The NFL has a lot of do with that increase, generally adding higher TV viewership, in contrast to non-sports TV programs, which continue to sink.
Now here comes a pretty likely positive: An estimated eye-popping $5 billion in political advertising is likely to swim into TV next year, with a lot of that going to local TV stations.
Guessing about next year -- where everything will net out, especially the first- and the key second-quarter TV advertising market -- will be a game in itself.