The Olympics and the presidential election helped boost national TV ad spending in 2016, but next year TV spending could sag, according to Magna Global.
The media buying firm released forecasts for 2017 and predicts national TV ad spend will fall 0.9%, though it would be up 0.7% if the Olympics and political spending was excluded.
Local TV will also suffer with no Olympics or political dollars to fall back on. Magna expects local TV ad sales in 2017 to drop 1.7% excluding the Olympics and politics, and drop a staggering 12.2% if those 2016 events are factored in.
Though rises in cost-per-1000-viewers (CPM) rates were strong enough to offset a decline in ratings, more bad news could be coming as traditionally strong-performing TV events like awards shows and NFL games could be losing their power to attract big ratings.
“Not only did audiences veer away from linear viewing on traditional platforms, but they start showing less interest for traditional television formats altogether,” Magna said, according to Broadcasting & Cable. “What most people consume on their computers, tablets or phone is often not the event’s simulcast or replay, but only the highlights. Instead of watching the full four hours of the Olympic ceremonies or the Super Bowl, they might watch ten minutes of highlights, reducing the opportunities for ad insertions.”
Though it has bounced back since the end of the election, the NFL’s ratings took a large nosedive early in the season. However, NFL games continued to see increasing ad rates despite the early slip.
According to Standard Media Index’s numbers for September, the average 30-second spot among networks showing NFL games in September was $489,193, up 4% from the same period last year and up 10% from 2014.
“Our new cost level data clearly shows that while ratings on football have been under pressure early in the season, average unit costs continue to increase,” said James Fennessy, CEO of SMI, in a statement. “This demonstrates that live sport and the huge audiences it attracts are an outstanding drawcard for major brands.”