Analyst Forecasts Bigger Decline in Total TV Advertising

Analyst Michael Nathanson of MoffettNathanson Research is forecasting a bigger decline in TV advertising for 2017.

In a new report, Nathanson sees national and local TV declining by 5.1% compared with his prior 4.1% estimate.

He sees the broadcast networks down 4%, cable nets dropping 2.5%, local TV stations falling 9% (including political), local cable down 10% and syndication slipping 1%.

Related: Advertisers Say TV Has More Impact Than Other Media: Survey

Overall, Nathanson’s latest forecast calls U.S. advertising growing at a slower 2.5% rate, with digital increasing 18.5%.

The new forecast follows second quarter earnings reports in which most TV companies reported lower advertising sales. Total national TV ad revenue was down 2%. More recently major ad agency holding companies have reported lower revenue because of spending cutbacks by big clients.

“Simply put, traditional media and agencies in the U.S. face the same problem. They have too much client concentration in sectors like retail, consumer products and auto that are not growing budgets and not enough small-to-medium sized enterprises that continue to fuel online growth,” Nathanson said in a report Thursday.

Related: Sports Gave TV Advertising a Boost in July, SMI Says

In the second quarter, Nathanson says total TV ad revenue was down 3.2%, broadcast network ad revenue was down 1.4%, cable dropped 2.4%, TV stations were off 7% and cable MSOs were down 5.4%.

National TV’s share of advertising dollars fell 3% in the second quarter versus online competitors, according to Nathanson’s figures. But Nathanson notes that most of national TV advertising spending is by Fortune 500 advertisers while online pulls money from a wider range of businesses.

(Photo via Pictures of Money's FlickrImage taken on Sept. 17, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 16x9 aspect ratio.)

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.