As local media companies build up their digital businesses, a new survey finds that the revenue from those businesses generates healthy profit margins.

The survey, conducted by Borrell Associates and the Media Financial Management Association, found that the average gross profit margin was 41.6% and the margin for earnings before interest, taxes, depreciation and amortization (EBITDA) was 32.8%. 

Broadcast media tends to have EBITDA margins in the 35% to 45% range, so digital is less profitable than its traditional business. For prime media, digital is far more profitable, according to Gordon Borrell, CEO of Borrell Associates.

In the early days of the internet, traditional media companies were concerned about trading media dollars for digital dimes. The new survey offers a look at how the gap has closed.

“There’s been a lot of skepticism about the profitability of digital operations at traditional media companies,” Gordon Borrell, CEO of Borrell Associates, said. “It’s great to see CFOs are providing insights on the digital profit factor so the industry can gauge a true bottom-line value.”

The survey also found that companies are carefully tracking the performance of their digital businesses, with 71% of the companies participating saying they have a formal framework for calculating digital profitability and 57% expressing strong confidence in the accuracy of their calculations.

“This helps pull back the curtain on digital profitability," said Joe Annotti, CEO of the Media Financial Management Association. “It shows that financial managers have their eyes on it and are in fact tracking margins for overall digital sales revenue, as well as a great number of individual digital products.” 

The survey also found that on average, companies report revenue from 11 digital products. For the survey, profit margins were calculated for seven.

The most profitable products were email newsletters, mobile advertising banners and geofenced ads.

The report notes that most of the responding companies did not include all expenses and shared resources when calculating the margins for their digital operations.

The online survey was conducted between October 24 and November 2 with 58 companies that are members of the Media Financial Management Association or clients of Borrell Associates participating. Most of the responses came from newspaper and radio companies.

Among respondents, 61% held C-suite titles, with 31% being a GM, president, VP or director.

Cross-media measurement, programmatic supply chain, advanced TV, addressable advertising and privacy-enhancing technologies are the top priorities for the IAB Tech Lab in 2023.

The IAB Tech Lab, which sets global standards for digital advertising, laid out its product roadmap for 2023.

“We are heading into a transformative year for the digital advertising sector where interoperability, transparency, and scalability will be imperative,” Anthony Katsur, CEO of the IAB Tech Lab, said. “Tech Lab has a critical responsibility to ensure that the industry works together to tackle these issues head-on. These priorities ensure that buyers and sellers can effectively work together to reach consumers efficiently, placing privacy and sustainability at the forefront.”

Katsus said the IAB Tech Lab is “calling on industry professionals and experts to lean into specific initiatives and contribute to the industry standards being developed to push the entire ecosystem forward.”

The Tech Lab’s 2023 Roadmap aims to build on the organization’s five pillars:

• Scalable, efficient and consistent management of cross-jurisdictional privacy regulations and compliance;
• Post-cookie and privacy-first addressability for audience activation and measurement;
• Universal addressability, reconciliation, and interoperability for TV advertising across streaming AVOD (ad-supported video-on-demand)/FAST (free ad-supported television) services, addressable linear and traditional linear TV;
• Secure, flexible and green programmatic supply chain for all digital advertising media;
• Cross-media, cross-channel, cross-environment consistent viewability verification and campaign measurement. ■

A new bipartisan Senate bill would impose restrictions on the biggest players in the digital advertising market that mirror those on electronic trading in the financial sector. Those restrictions would prevent the largest providers of ad-supported digital platforms from also selling third-party ads, meaning major divestitures for Big Tech's biggest.

The Competition and Transparency in Digital Advertising Act is targeted to the dominance of Google and Facebook in the digital ad market. The bill's backers point out that Google Ad Manager is used by 90% of large publishers, for example.

A bill summary supplied by Sen. Mike Lee (R-Utah) is particularly tough on Google, saying that Google "uses its pervasive market power across the digital advertising ecosystem, and exploits numerous conflicts of interest, to extract monopoly rents and stack the deck in its favor." But other tech giants would be in their sights as well.

The summary minced no words about the potential impact.

"If enacted into law, this bill would most likely require Google and Facebook to divest significant portions of their advertising businesses — business units that account for or facilitate a large portion of their ad revenue," the summary flatly states. "Amazon may also have to make divestments, and the bill will impact Apple’s accelerating entry into third-party ads."

Also: Bills Prompt Faceoff Between Big Tech, Antitrust Groups

Joining Lee in introducing the bill Thursday (May 19) were some big names in the competition oversight space: Sens. Amy Klobuchar (D-Minn.), Ted Cruz (R-Tex.), and Richard Blumenthal (D-Conn.).

Bill backers say those are monopoly rents that constitute a tax of more than 40% on every ad-supported website that advertises online, which together comprise a big chunk of the entire economy.

While the bill appears to focus on Google, its supporters also say the legislation will need to apply broadband "to avoid replacing one abusive monopolist with another."

The bill prohibits large digital advertising companies -- and they mean large -- from owning more than one part of the digital ad ecosystem. Large is defined as "process[ing] more than $20 billion in digital ad transactions."

That means that ad exchange owners can't own supply side platforms or demand-side platforms unless those only run their own ad inventory.

All digital ad companies that process more than $5 billion in digital ad transactions would also have to abide by some customer and competition-protection obligations, including to act in customers' best interests, to be transparent about their business practices, and to erect firewalls if they are allowed to operate on both sides of the market, which would be those over $5 billion but under the $20 billion threshold.

But wait, there's more. Both state attorneys general and the Department of Justice would be charged with enforcement, and there would be the dreaded -- at least from companies' perspectives -- private right of action for violations of the obligation for $5 billion-and-up companies if committed by those with over $20 billion in business.

"While online advertising is essential to nearly every business, this broken system has been the primary driver of growth for the tech companies that have failed us in so many other ways: by undermining our privacy, censoring our speech, and exploiting our children," said Sen. Lee.

“For too long, Google and Facebook have dominated the digital advertising marketplace at the expense of advertisers, publishers, and consumers. It is past time for a transparent ad technology industry where the best interests of customers are prioritized and companies of all sizes are able to compete," said Sen. Klobuchar. "This legislation will put rules in place to do just that, restoring and protecting competition in digital advertising to create a more even playing field that will promote fairness and innovation moving forward.”

“Structural interventions in the marketplace are a blunt instrument and would be a bad precedent to set for antitrust regulation," said CCIA President Matt Schruers. "The bill would make online ads more costly and harm consumers and the economy.”

Interactive advertising interests also did not share the legislators' enthusiasm.

“This legislation is intended to punish a few companies, but the effects would reverberate across the digital economy, affecting advertisers large and small as well as the American public," said Interactive Advertising Bureau CEO David Cohen. "The unintended consequences would be devastating to one of the most powerful growth engines of the U.S. economy. The market would lose the scale and precision the internet offers, ad costs would rise, and growth opportunities for brands and publishers would disappear. Small businesses and content creators across the country wouldn’t exist without integrated technologies helping them to attract and retain customers, providing them with products and services."

The Connected Commerce Council saw the bill as a disconnect, suggesting it would "disproportionately hurt small businesses that use affordable digital ads to promote their business." ■

Ad revenue on streaming video jumped 50.8% to 39.5 billion in 2021 according to a new report from the IAB.

Streaming media was a big contributor to an overall increase of 35% to $189 billion for the year.

“We fully expected 2021 to be an exceptional year for digital ad growth, but even we were surprised at the degree of acceleration. Not only was every single digital channel up, but some were up more than 50% year on year,” said Libby Morgan, senior VP, chief strategy officer at the IAB. “This year’s increase is three times what it was last year.”

Digital audio was up 57.9% to $4.9 billion.

Social media advertising was up 39.3% to $57.7 billion.

Search engine ad revenue was slower, posting a 32.8% gain.

Overall, digital advertising revenues were up 35% to $189 billion in 2021, the biggest increase since 2006.

“What’s underneath these numbers is a very clear narrative. We are witnessing the total and complete democratization of access afforded by ad-supported digital channels,” said IAB CEO David Cohen. “Increased consumer usage coupled with extraordinary growth of small and mid-sized businesses during the pandemic has fueled growth across all digital — but especially digital audio and video. We expect this digital migration to drive the continued growth of a healthy and competitive digital marketplace driven by innovation and entrepreneurship.”  ■

The Interactive Advertising Bureau (IAB) has taken aim at the Banning Surveillance Advertising Act, which would ban the use of personal information to target most online advertising, saying the bill would kill the commercial internet as we know it.

The bill was introduced this week by Reps. Anna Eshoo (D-Calif.), Jan Schakowsky (D-Ill.) and Sen. Cory Booker (D-N.J.). IAB said they must not understand the degree to which the bill would "effectively eliminate internet advertising in the United States, jeopardizing an estimated 17 million jobs primarily at small- and medium-sized businesses."

“If the sponsors understood the devastating effects this bill would have, not only on the advertising industry, but also on our entire economy, they wouldn’t have introduced it,” said IAB CEO David Cohen in a statement.

Also: FTC Ponders Rules on Data Privacy

The bill prohibits advertisers or third parties from using personal data for most targeted advertising, the exceptions being ones that use broad location targeting to, say, a specific city.

The bill would prevent any targeting of ads based on race, gender, religion or any personal data purchased from data brokers. It would not prohibit so-called "contextual advertising," which are ads relevant to content a user is engaging with.

It also defines that personal information broadly, saying it comprises "data linked or reasonably linkable to an individual or connected device, including inferred and derived data, contents of communications, internet browsing history, and advertising identifiers."

Also: Digital Advertising Still Growing, But Faces Concerns, IAB Report Says

“Banning personalized ads would severely impact an increasingly important economic sector, stifling innovation and dramatically harming the small business community who use data-driven advertising to promote their goods and services and reach customers all over the world,” said Cohen. “This bill would make advertising less precise, more expensive, and raise costs for everyone.

“This terrible bill would disenfranchise businesses that advertise on the internet, and hundreds of millions of Americans who use it every day to find exactly what they need, quickly. It could eliminate the commercial internet almost entirely." ■

The Maryland General Assembly has overridden Governor Larry Hogan's veto of the Digital Advertising Gross Revenue Tax (HB 732), according to the Association of National Advertisers (ANA), which signals it will take the law to court.

Ad sales and services taxes are periodically introduced as states look for new revenue and ANA is always on the lookout to spread the alarm when that happens, but ANA has said this would be the first one that passed a legislature.

The law institutes a gross revenues tax on "certain" digital ad services, and presumes that digital ads are provided in the state under "certain" circumstances and require "certain" persons with "certain" annual gross revenues from digital ad services to pay the tax.  

Also Read: ANA Warns of D.C. Ad Tax

Of his veto, Hogan said at the time (back in May 2020) that the economic fallout from the COVID-19 pandemic means it would be "unconscionable" to approve any new "tax hike" legislation. The bill would also boost the state's coffers, which have also been hit hard by the virus, which is likely why it secured enough votes to override the veto.  

The bill would levy a 10% tax on “annual gross revenues of a person derived from digital advertising services in the state.” The tax adjusts according to a company’s global annual gross revenue and could have applied to a lot of companies. 

“ANA believes this law will be found to be unconstitutional and violates the Internet Tax Fairness Act that bans discriminatory taxes on Internet digital communications," said Dan Jaffe, ANA Group executive VP of government relations, in a statement. "Enacting this law will slow job growth in Maryland, dampen consumer demand, discourage business investment, and ultimately cause consumers to pay far more for products and services. It will create a highly toxic marketplace for digital advertising and needs to be overturned in the courts."

Also Read: Advertisers Try to Help Providers Navigate CCPA

Jaffe said he anticipated "a successful challenge in the courts to this law," which he argued would be sufficiently costly for the state to "negate the legislature’s argument that this tax will provide funding for education," adding "we intend to continue to fight against this misguided bill."

“While aimed at large tech companies, taxes are always passed on to the customer. In this case, small businesses that have come to rely primarily on digital ads for effective, affordable advertising will see their prices increased at a time when small businesses are struggling to survive the worst economy in decades," said Connected Commerce Council (3C) President Jake Ward.

“Lawmakers always claim to support small businesses, but time and time again, they turn around and pass laws that hurt small businesses," said Ward. "Instead of passing short-sighted taxes, the government should help small businesses maximize digital advertising and other low-cost digital tools. Small businesses need training, education, and support to better use digital tools, not tax penalties for using them.”

At a time when digital ad spending is growing while spending on traditional TV is flat at best, Comcast's Effectv ad sales unit has released a study showing that marketing strategies that employ both forms of media perform best for brands.

The study, conducted with Mediascience, notes that TV now uses data to reach target consumers. At the same time, TV has a unique ability to legitimize new brands. The study found that consumers were 35% more likely to make a purchase of an unknown brand’s product after seeing the ad on TV, compared to those exposed on digital alone.

Brand recall more than doubled when a digital ad is accompanied by a TV ad for the same brands and there was a lift in purchase intent of 15% when ads aired on TV plus digital compared to digital alone.

“This study demonstrates TV advertising’s impact on consumer awareness of and attitude toward both established and lesser-known brands,” said John Brauer, executive director of data, insights and innovation at Effectv. “TV is a trusted source of information, and pairing TV with digital video more effectively builds brand strength than digital alone.”

Other findings of the study were that adding TV improves total campaign performance, that TV provides a halo effect for digital ads, causing the digital ad to be more appealing and that viewers spend three times more time with digital ads when they’re preceded by a TV ad.

Digital ads were perceived to be less intrusive and less “annoying” after TV exposure, the study said.

“Brands, no matter what their stage of maturity or size, stand to benefit from a combined TV plus digital strategy,” the report concludes. “One without the other could erode brand strength and purchase consideration over time. This study proves the memory effects of digital video are enhanced with the brand building power of TV, and that’s why digital loves TV.”

The Association of National Advertisers is celebrating the veto Thursday (May 7) of a Maryland digital ad tax bill that passed the legislature but fell under the weight of the governor's veto and the downward economic pressure of a pandemic.

ANA had pushed back hard on the legislation.

The Maryland almost-law (HB 732) would have been a gross revenues tax on "certain" digital ad services, and would have presumed that digital ads are provided in the state under "certain" circumstances and require "certain" persons with "certain" annual gross revenues from digital ad services to pay the tax.

But Republican Governor Larry Hogan said the economic fallout from the COVID-19 pandemic means it would be "unconscionable" to approve any new "tax hike" legislation. The bill would have boosted the state's coffers, which have also been hit hard by the virus.

He said the bill was misguided and would raise taxes at a time when many are out of work and struggling.

Ad sales and services taxes are periodically introduced as states look for new revenue and ANA is always on the lookout to spread the alarm when that happens, but ANA said this would have been the first one that had passed a legislature.

The Maryland bill would have levied a 10% tax on “annual gross revenues of a person derived from digital advertising services in the state.” The tax would have adjusted according to a company’s global annual gross revenue and could have applied to a lot of companies. The tax would also have extended to companies "that reasonably expect the person’s annual gross revenues derived from 10 digital advertising services to exceed a certain amount to complete."

"The veto of this counterproductive proposal is an important victory for ANA and our members," said ANA. "It relieves small and large businesses of a major burden on their efforts to market their products and services, which in turn helps protect the almost 400,000 Marylanders whose jobs are supported by the sale of products and services generated by advertising – nearly 15 percent of the 2.6 million jobs in the state."

Advertisers in the U.S. spent $17.6 billion on digital advertising during the third quarter, up 20% from a year ago, according to a report prepared by PwC U.S.

Digital spending continues to increase despite concerns over effectiveness, fraud and sometimes misleading metrics. Most forecasters expect digital spending to surpass spending on TV advertising as early as this year.

“Digital has become a critical part of advertisers’ marketing strategies,” said David Silverman, a partner at PwC U.S. “Increasing media consumption on interactive screens will surely lead to even more investment in the digital landscape.”

The third-quarter spending was also up 4.3% from the second-quarter total.

Read more at broadcastingcable.com.

"For-profit providers of software that blocks ads from appearing on websites...'ad-block profiteers,' as I call them, are stealing from publishers, subverting freedom of the press, operating a business model predicated on censorship of content, and ultimately forcing consumers to pay more money for less -- and less diverse -- information," Randall Rothenberg, president/CEO of the Interactive Advertising Bureau, charged in a speech to the Media Institute in Washington Sept. 9.

And although federal efforts to regulate Internet advertising have subsided, state and local governments are increasingly trying to put restraints on the industry, Rothenberg said in a speech entitled "Advertising, Consumer Choice and the Future of Media.”

He characterized the ad-blocking business as "a protection racket" the tells Web publishers, "Pay up, or we’ll break your windows!" Rothenberg cited three companies -- all based off-shore (Ad-block  Plus from Germany, Shine from Israel and Horizon Ventures from Hong Kong) as the major offenders who "want to tell everyone else what they can and cannot read and watch and hear -- self-proclaimed libertarians whose liberty involves denying freedom to everyone else."

"The ad-block profiteers are building for-profit companies whose business models are premised on impeding the movement of commercial, political and public-service communication between and among producers and consumers," Rothenberg said.

He cited IAB research that found one-third of U.S. Web users -- and 41% of millennials -- have installed ad-blocking software on at least one device.

Rothenberg acknowledged that "intelligent, well-meaning critics of advertising, marketing and media" continue to voice concern about the potential for digital marketing to violate personal privacy," adding, "The sad fact is, the digital advertising industry has run roughshod over our own users, delivering ugly pages overwhelmed by ads that are slow to load and increase consumer distrust of the medium."

Rothenberg conceded that government proposals "had the laudable and necessary goal of protecting user privacy, all of them extended the definition of privacy beyond historical norms." He said that subjecting to government oversight "any and all data that is used to underpin the functions of the Internet" prevents advertisers from using material "even if that data cannot compromise an individual’s identity, let alone cause him or her any harm."

"While privacy remains an even greater, legitimate concern for Americans than ever, I am pleased to say that the threat of errant Congressional or regulatory actions appears to have subsided because of industry’s strong adherence to self-regulation," he said. Rothenberg cited industry initiatives such as the new Trustworthy Accountability Group’s “Certified Against Piracy” program that helps marketers identify sites that present an unacceptable risk of misappropriating copyrighted content and selling counterfeit goods, and remove those sites from their advertising distribution chain.

Befitting a tout for the digital advertising industry, Rothenberg recited a litany of data about the stunning growth of online, mobile and other forms of interactive marketing.  Using the same data that Rep. Greg Walden (R-Ore.) cited in a recent speech on cross-ownership, Rothenberg pointed out that for the first time, digital advertising will exceed broadcasting and cable spending combined this year.

"In 2015, marketers spent $60 billion to advertise in digital media – nearly 33% more than marketers spent on broadcast television, the second largest medium," he said. "If current trends continue – and they will – we expect that digital media in 2016 will account for more U.S. ad spend than the broadcast and cable TV industries combined."  

Citing Harvard Business School research, which Rothenberg said will be updated early next year, he hit on a point that appeals to policy makers: Internet advertising employs more than 5.1 million people, nearly a quarter of them in very small firms or sole proprietorships, "in every Congressional district in the United States." The total "Internet advertising ecosystem" was valued at $530 billion a few years ago, he said, and has grown substantially since then.

Tech Standards in Development

Rothenberg also cited reports about cable churn and other factors spurring the growth of online and mobile content, such as a recent Cowen & Company projection that U.S. digital video ad spending will triple by 2020, reaching nearly $30 billion: "larger than today’s cable TV industry."

Rothenberg used that data to extol digital media's ability to delve into new services.

"By tearing down barriers-to-entry in both content creation and distribution, interactive technologies make it possible for an individual to publish a national 'magazine,' make a documentary film, record an original symphony, even program a television network, and seek audiences around the nation and the globe," he said.

"Unlike every other major medium, the Internet is a collectively owned and managed enterprise," he explained. "Whereas a broadcast television network controls and maintains rigorous standards for everything a consumer sees on its channel, an Internet page is a cobbled-together assembly of parts, managed by dozens of independent businesses, each contracted individually by the publisher, ad agencies and marketers."

The IAB chief said that "this decentralized cauldron of innovation" needs "guiding principles" and cited the work of the IAB Tech Lab to provide technology solutions, such as the new LEAN Principles (Light, Encrypted AdChoices-supporting, Non-invasive). Rothenberg called LEAN "the basis for a sustainable advertising ecosystem" and said it will be used in a new rating system that will "measure the user-friendliness of both publishers’ sites and advertisers’ assets."

Inside ad tech, we place enormous value on disruption. To digital people, it’s shorthand for systemic innovations that will revolutionize any industry. But to those on the receiving end, it’s often seen as code for decimation.

That’s the current line of demarcation between ad tech’s disruptors and television’s old guard. Traditional television, which has profited tremendously to date, sees any change as a threat. On the other side, digital companies see an online ecosystem where data is the essential ingredient to delivering audience, and wonder how long their counterparts inside the television bubble can ignore the inevitability of innovation.

Bridging this divide isn’t easy, and at times digital companies approach television with naiveté, assuming their way is better and that traditionalists would be fools not to adapt. Call it arrogance, if you like. Some ad tech companies believe that better technology, better data, faster transactions and automation are the panacea for all issues, including those surrounding television. But what that mindset fails to account for is the fact that the $75 billion TV industry was built over the course of 60 years, via disparate systems that are held together by imperfect, but accepted practices that have served them well. In other words, television represents a massive achievement that’s gotten right more than it has gotten wrong, even if there are obvious places for improvement.

Currently, we’re at an impasse. Now that cord-cutting has shown some real damage in subscriber losses and digital advertising is creeping into TV ad budgets, media companies are recognizing the need to shift to an audience-based strategy. But when the audience you’re reaching is watching on linear TV, mobile apps, OTT apps, MVPD video-on-demand and browsers, how do you offer a cohesive audience to your clients?

To date, wary television companies have tried to solve that challenge on their own terms by building walls around their audiences that cordon off content on any device, whether it be a television, computer, phone or tablet. Stitching audiences together looks like a solution, but once those audiences have been on-boarded, off-boarded and ID-mapped, they still exist in silos. That should give advertisers pause, because they’re being asked to rely solely on an audience created inside a seller’s black box.

In the short run, advertisers might gamble on those siloed audiences because they want their brands associated with TV’s premium content. But soon enough, two forces will conspire to knock down television’s walls. First, younger audiences will reject television’s outdated rules. The millennials who are buying houses and starting families right now have no concept of appointment television and think a “lead-in” is the next suggested video on YouTube. Second, advertisers that went along with the black box will eventually demand the transparency of digital media.

For years, TV has transacted billions of dollars on limited options for audiences based on small panels of viewers. Now that programming is spreading across many screens and distributors, and that ad tech has promised marketers precision in targeting, traditional TV is feeling the weight of this force from all sides.

The truth is, digital isn’t here to stop television; it’s here to save it. Consumers want more binge-worthy shows, and if that business is going to be sustainable over the long haul, digital media experts need to partner with TV veterans to create the common data language that’s a necessary prerequisite for monetization in the 21st century.

Ryan Reed is director of TV solutions at Lotame, a New York-based data management company.

The Web browser continues to cede valuable ground to other digital platforms amid growing usage of OTT devices, smartphones, and even cable-supplied set-top boxes, FreeWheel, the Comcast-owned ad-tech company, found in its latest quarterly report.

“Propelled by 76% growth across OTT (Roku, Apple TV, Chromecast, Gaming Consoles, and Smart TVs) and 92% on smartphone devices, as well as the inclusion of STB VOD, which amounted to 10% of total delivery, never again will the browser be the first stop for digital video content,” FreeWheel noted in its Q4 2015 Video Monetization Report.

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With respect to ad views by device type, desktops/laptops still led all categories with 40% share, but was up only 0.1% year-over-year. OTT devices, meanwhile, scored a 22% share (up 76%), followed by smartphones (19%, up 92%), set-top VOD (10%), and tablets (9%, up 40%).

Among OTT devices, Apple TV held court with a 44% share of ad views, followed by Roku (34%), gaming consoles (15%), Google’s Chromecast adapter (5%), and smart TVs and the Amazon Fire TV (1% each).

FreeWheel’s study also offered an update on the momentum of authenticated TV Everywhere services.

Authenticated viewing for long-form and live content accounted for 65% of monetization in Q4 2015, up from 56% in the year-ago period.

“While we saw very strong progression in video ad views across authenticated content at 142% year-over-year, looking back at the previous four quarters of growth there is a notable decline across the top-line, especially when comparing to the staggering 591% rate we reported in Q4 2014,” FreeWheel said.

Entertainment content was top category for TVE with respect to video ad views, rising 202% year-on-year, followed by sports (46%, up 69%), news (6%, up 98%), and kids fare (5%, up 2,073%).

Among other findings, long-form on-demand and live streams were the fastest growing content areas – up 56% and 129% year-over-year, respectively.  Authenticated ad views also accounted for more than 65% of all long-form and live programmer monetization, FreeWheel said. 

Media agency ZenithOptimedia forecasts that advertising spending on TV will be basically flat over the next three years. Meanwhile spending on digital media, particularly video, is expected to climb.

In its second quarter forecast, ZenithOptimedia forecasts that TV spending will rise 2% to $68.1 billion in 2016, an Olympic year, after a small dip in 2015. The agency sees spending increasing negligibly in 2017.

TV dollars are expected to continue to shift from broadcast to cable. ZenithOptimedia sees broadcast network spending sliding from $15.7 billion in 2017 from $17.4 million in 2014 following a decline in ratings. “Networks are continuing to focus on recapturing audiences across other screens, fueling growth of their digital and mobile business. Among these opportunities is the advancement of dynamic ad insertion,” the agency says in its forecast. 

Spending on cable is seen rising to $24.2 billion in 2017 from $22.4 billion in 2014 as cable networks add more quality original programming to their lineups.

Read more at B&C.