Broadcast, Digital Help Q1 Finish On A High

March and the first quarter delivered strong gains for television and digital media’s advertising revenues, a positive result as the industry heads into the all-important upfront and newfronts, according to Standard Media Index (SMI). The total advertising market grew 4% year-on-year in March and was up 8% for Q1 2016 when compared to 2015.

Intensified spending on premium digital properties accelerated in March and drove the digital sector to another stellar month (16%) and ensured the digital sector delivered another outstanding quarter (20%).

Thanks in part to television’s growth in March (2%), the sector also surged ahead in the first quarter of 2016 (4%) as this year’s crucial upfront negotiations approach, which are poised to be the strongest in several years.

“These results continue to reinforce the strength of the major TV networks in an increasingly fragmented market. Large, engaged and measurable audiences that advertisers have confidence in have seen the medium deliver terrific results in recent months. Our data clearly shows a number of major categories, like CPG and auto, moving money back into TV after a lot of experimenting with digital last year. Concerns around viewability and measurement have caused marketers to reassess their mix and we’ve seen television as the major beneficiary here,” said James Fennessy, SMI’s CEO.

“The overall news hasn’t been so great for many of the cable networks with continued soft ratings biting into revenue growth. Hopefully, new total audience measurement initiatives will soon provide a more holistic picture of viewership on all platforms, which should translate into better revenue for everyone in the sector. Premium video and social are the key growth drivers for digital and it’s clear that more reliable measurement make these mediums far more attractive for advertisers.”

SMI recorded slower performances for its other media sectors in March. The magazine, newspaper, out of home and radio sectors all weathered sharp year-on-year percentage decreases in the single to double-digit range.

SMI March Ad Market Highlights

• In March, broadcast TV spending spiked by 15% year-on-year and cable TV decreased by -5% for the month.
• It was a mixed month for the upfront market. Ad investment was relatively flat with 2% YoY growth, driven by broadcast’s 7% growth and cable’s -2% decline.
• It was a tale of opposites in the scatter market – broadcast spending accelerated by 48% YoY in March and cable TV dropped by -14% compared to the same time in 2015. The total market was up by 10% YoY.
• The top six broadcast networks enjoyed sharp growth (15% YoY) in March 2016. CBS led the pack off the back of a very strong NCAA Men’s College Basketball Tournament.
• Fox, Univision and Telemundo all saw double-digit increases, despite soft ratings data.
• There were widespread year-on-year declines across cable networks in March. HGTV, Food Network and Adult Swim put in the best performances and attracted reasonable year-on-year growth. Softer ratings in the sector have affected ad volumes, with recent reports suggesting a -5% YoY ratings drop in the season-to-date.
• Looking at TV’s market share in Q1 over the same period in 2015, the sector currently represents 54.4% of the total pie, having dropped by 2 percentage points from 56.3% in Q1 2015.
• Ad spend volumes were up across digital media (16%) in March. SMI saw investment in internet radio (49%), social media sites (43%) and video sites (35%) all jump significantly on the same period last year. Digital was up 20% YoY for Q1 2016.
• SMI’s data recorded a -15% year-on-year slump for the out of home sector in March 2016, but it was up 2% YoY for the quarter.
• Ad revenues recorded some large drops in the print market in March. Newspaper spending dropped -23% YoY while the magazine sector fell by -16% in the past month. The sectors netted out with -12% and -11% declines respectively for the quarter.
• Radio ad volumes were lower in March and fell slightly by -2% YoY, however they rose 6% to round Q1 2016.
• The top growth categories in a year-on-year performance for March were consumer electronics (43%), prescription pharmaceuticals (29%) and automotive vehicles and dealerships (21%).

Interestingly, as auto ad budgets increase in SMI’s data, auto sales reached their highest monthly rate in almost 10 years in March to hit 1.66 million per month. A recent report said auto sales were up 8% on last year.

SMI captures 70% of total national U.S. agency spend exclusively from the booking systems of the world’s leading global media holding groups, as well as leading independents.