With all of the major media companies that own TV networks having reported their latest financial results, analyst Brian Wieser of Pivotal Research calculated that national advertising was down about 1% during the second quarter.
While the second-quarter loss was an improvement on the first quarter's 3% decline, “a generally flat to slightly negative advertising environment should persist for the foreseeable future,” Wieser said in a note.
During earnings calls, Wieser said, executives talked about strong pricing in the scatter market, changes in audience measurement and advances in audience targeting as reasons to be optimistic about future ad revenue growth.
Related: Fox Seeing Big Gains in Non-Linear Advertising Sales
But Wieser isn’t buying it. He tackled those arguments in his note, one by one:
“Pricing does not necessarily reflect changes in demand.”
Weiser noted that ad sales execs have more information about their inventory, giving them advantages in negotiations with buyers, who usually want spots in specific shows. Some scatter advertisers pay higher prices for their advertising because they are newer advertisers, automatically resulting in scatter prices that are higher than upfront price.
“Advertisers already know that not all viewing is measured.”
Wieser said a measurement system that increases viewership by 5% won’t be accepted by buyers unless it comes with a 5% discount in price.
“New forms of audience targeting help media owners identify different value for their inventory, but won’t cause most advertisers to change how they budget for the medium, either.”
Large advertisers have TV budgets that probably won’t change, even if more of their TV budgets are spent on more targeted products, Wieser said.
The changes media executives are talking about won’t affect TV, Wieser said. And the large advertisers that dominate TV are mostly losing sales to newer competitors and looking to cut costs. New TV advertisers are not coming along to replace older ones.
“We don’t see many new categories of marketers emerging who drive TV – those who are large, consumer-focused, differentiate themselves on the basis of awareness of attributes, budget on a share-of-voice basis and operate in nationally oriented and oligopolistic sectors,” Wieser said. “Towards these ends, we don’t see a rebound in growth for traditional national TV advertising any time soon.”
