Is the legacy TV advertising market really bifurcating -- at least in the short term?
Here is one current example: Local TV appears to be maintaining its strength in advertising coming off a strong fourth quarter, which pulled in typically strong midterm political advertising, while national TV is very weak -- the scatter market, that is.
And now it seems there is some continued strength as we start a 2023 non-political election season.
“Local was strong in January and February,” said Robert Weisbord, chief operating officer of Sinclair Broadcast Group, in a recent earnings phone call. “The weakness we’re seeing is really on the national side.”
Weisbord did not provide specific details, and of course it’s still early in the year. And we haven’t seen what categories are actually growing. One thing is certain: “core” local TV advertising overall remains weak -- at least for the fourth quarter. Record political advertising more than made up for this.
Then Perry Sook, CEO of Nexstar Media Group, said the same thing — almost.
“The weakness we see is in national, where national advertisers — who obviously aren’t as close to the end-user and customer — have paused or reduced spending due to a potential weakness in consumers going forward,” he said.
The intent here comes down to niche audience marketing, he signals — that local TV stations are on the ground close to those local advertisers' business activities, and they get a better read on things
Local TV stations would like to believe their businesses can rival Facebook and Google, which built their businesses on millions of local marketers looking for specific business outcomes from digital messages.
Although these companies have recently taken a hit when it comes to advertisers, both still have tremendous power and strength moving forward.
Dare we say that perhaps local TV is still looking to ramp up more of those digital businesses? Surely, it is now packaging locally based OTT platform advertising sales -- from new ad-sales businesses -- to be added into their traditional linear TV buys for extended reach.
Those digital revenues themselves are still slow-moving. But perhaps local TV might get more attention when it comes to renewing advertisers' interest in the broader-reach approach for their specific markets.
Still, I wonder if the early 2023 start for local TV stations is just a minor trend -- and may not be long-lasting.
We will, as they say, stay tuned. If not that, maybe just stay streamed.
Wayne, one of the major issues facing local TV stations is the continuing weakness they are experiencing in attracting national advertising "spot" spending---especially in markets 50 and below in size. In addition they are competing for local TV ad dollars with "spot cable" which pulls away upto 20 % of their ad revenues in many markets. Add to this is the inclination of local advertisers---in particular, those with smaller ad budgets as well as more selective consumer targets ----to use streaming or digital venues and you have a major ad revenue problem.
How can it be solved? For decades the stations via the TVB have tried to sell national advertisers on the idea of planning their national campaigns first on a market by market basis ---using spot TV tailored for variations in sales potential in each market---- followed up with national network buys to offer umbrella coverage. THis has largely fallen on deaf ears for a variety of reasons which it will take too long to explain. So that avenue for growth is largely closed. As for local media competition---spot cable, streaming, social media, digital media, newspapers, OOH, etc.--- making headway ---or even holding what you had---is a very difficult proposition, calling for new sales approaches and new kinds of sales teams, backed by marketing savvy researchers and others in the organization who speak the advertisers' language. Couple that need with the atrocious "audience" measurements that are employed at the local level and it's an uphill battle for many stations.