The NY Post, the strategy firm’s spring update to its annual forecast says ad sales at the main TV broadcast networks will fall 6 percent, to $13.7 billion, in 2017, excluding Spanish-language outlets, as demand tanks for spots selling everything from beer to department store duds.
In cable, the number will drop 1 percent, to $25.8 billion, according to Magna.
The projected drop-off is partly driven by a lack of political and Olympic ad dollars as opposed to last year’s bonanza, according to the report. But it’s also a result of ratings declines coupled with softer price increases, the firm noted.
This spring’s upfront negotiations, whereby TV advertisers commit their ad dollars in advance of their ad placements, have been slow. Sources tell The Post that advertisers are prepared to pay a premium to hold on to their money and place it when they need to in the so-called scatter market.
NBCUniversal, Fox and ABC have begun talks with advertisers, according to a report from Variety that suggests advertisers are trying to hold the line on the typical percentage price increases.
In the US, the food and beverage category has dried up in a big way, with beer spending off 30 percent in the first quarter of this year. Retail dropped 3 percent, driven by a 21 percent plunge in ad dollars from department stores over the same period last year, according to Magna statistics. Retail outlets have been shutting stores as shoppers turn to online services for their needs.
Auto ad sales were off 12 percent in the same period, making life difficult for local media companies.
Among the other full-year ad forecasts from the report:
- Broadcast radio will decline 4.4 percent, to $13.4 billion, an acceleration of the 3 percent decline in 2016. Magna’s forecast does not include spending on radio companies’ digital extensions, which is a growing area and a bright spot for radio broadcasters seeking to generate new revenue streams. Magna notes that advertisers are investing money in streaming audio and other audio digital formats.Radio’s digital billings for U.S. broadcasters are expected to rise 17 times faster than over-the-air revenues, according to a separate forecast by BIA/Kelsey, which said radio digital would grow 8.4% this year, while over-the-air ticks up just 0.5%.
- Out-of-home advertising, including cinema, is expected to grow 2 percent, to $7.9 billion.
- Print ad sales will fall 13 percent, to $18.1 billion, a third of what the sector captured 10 years ago.
- Digital media ad sales will jump 14 percent, to $83 billion, and will account for 45 percent of media spending. Within that category, mobile advertising is growing 34 percent, to $48 billion.