• by David Kaplan , March 2, 2005

Advertising revenues for the Big 3 networks rose 12.1 percent in 2004--a so-called quadrennial year in which both the Summer Olympics and the presidential elections occurred, according to estimates released Tuesday by the Broadcast Financial Management Association. While it's no surprise that network revenues would rise during such a year, the data reveals that the effect of the elections may actually become a negative one.

ABC, CBS, and NBC's ad revenue totaled approximately $11,727,000 for 2004--representing a 12.1 percent gain over 2003's results--and the networks also experienced a 2.8 percent rise for the fourth quarter compared to 2003, BCFM's report on figures compiled by Ernst & Young said.

As widely acknowledged, ad spending for the Summer Olympics and the national elections is the primary reason behind last year's positive numbers. Both events are so huge, they tend to mask declines that are occurring throughout the day-to-day broadcast universe. For example, while the news category was up by 7.4 percent ($657 million in total--and up by more than 14 percent for the quarter over 2003 results--it was nearly 36 percent less than news revenues for the 2000 election year, which BCFM attributed in part to campaign spending that favored key local markets over national buys. Given the ability to carefully pinpoint shifts in voter attitudes, local spot--especially during the all-important news time period--is sure to grab an ever-larger share of campaign dollars in the future.

"While the 2004 and fourth-quarter results were also better than in the last Presidential election year, we view the $78 million decline in news advertising revenues during the fourth quarter of this year's election as due in part to diverting campaign spending to swing states, which would have benefited local advertising results for stations serving those markets," said a statement from Mary M. Collins, BCFM's president and CEO.

Also in its report, BCFM noted that prime-time advertising--which was up by more than 4.6 percent for the year--was practically flat for the fourth quarter, and down 0.03 percent when compared with 2003. The late night and children's categories also declined in the fourth quarter--down by 5.5 percent and 15.3 percent, respectively.