TV Ad Spending Rose 3.2% to $2.4B in July

Ad spending on national TV rose 3.2% to $2.4 billion in July, powered by a big gain in cable, according to new figures from research company Standard Media Index.

SMI, which gets its data from the computer systems of media agencies accounting for 70% of all U.S. spending, now provides information on spending in dollars as well as percentage changes.

The gains came from buys made recently in scatter, where a 19% increase in volume more than offset a three percentage point drop in upfront sales.

Broadcast advertising revenue was up 1% in July to $722 million. NBC, with Olympic trials and America’s Got Talent, and CBS, with the PGA Championship, were the only broadcast networks to post gains during the month.

Primetime on the broadcast networks was down 11% to $411.8 million and late fringe slid 7% to $31.2 million.

Daytime was the bright spot on the broadcast networks, thanks to CBS’ golf and the network morning shows, up 13% to $65.7 million.

Cable advertising was up 5.6% to $1.59 billion, with strong performances from HGTV, TNT, Food Network, Bravo and the news networks.

In terms of pricing, 30 seconds of broadcast time fell 1% with prime down 10% to an average of $62,400 per spot. The cost of spots in late fringe dropped 5% to $18,720.

On cable, commercial unit costs rose 2%. Prime gained 7% to $6,600 per spot and early fringe was up 9% to $3,240.

Makegood ads design to compensate clients for ratings underdelivery, shrunk as a percentage of inventory, with Audience Deficiency Units dropping to 15% of inventory on the broadcast nets from 19%. On cable, ADUs represented 19% of inventory, down from 30%. Only 15% of the units in prime were makegoods.

“We see national TV as an ROI powerhouse for advertisers in the current market. We have seen digital’s growth slow considerably in the past few months and we put this down to advertisers returning to TV after being a little too aggressive with their foray into digital. There is no doubt some advertisers saw sales fall late in 2015 and the early part of this year and have responded accordingly,” said James Fennessy, SMI’s CEO.

“We have demonstrated that these same advertisers have turned sales around in the past quarter as they capitalize on the very cost effective CPMs that can be found in national TV, and especially cable. Nielsen continues to underreport true audience numbers and we believe there are great deals for advertisers in both broadcast and cable before measurement finally catches up,” he said.

Overall ad spending was up 3% from last year.

Digital growth slowed in July to 12%—about half the growth it has been racking up over the past three years.  Search was down 2%—the first drop since SMI began tracking digital—but social was up 40% and video was up 23%.

(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 3x4 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.