Spot TV advertising took a sharp hit in third quarter of 2013, falling 14.2 percent, according to the latest numbers from the TVB.
A decline was expected. After all, the quarter faced tough comparisons to 2012, when a record amount of political dollars were spent on local television.
But the loss of political dollars doesn’t explain everything.
Buyers say that the losses also reflect a growing trend of advertisers in major categories such as auto and telecommunications shifting money from spot TV to other media, like national cable and digital.
“Some of the changes are not necessarily spending going down, it’s just going in different places,” says Nancy Roth, senior vice president and media director at Marc USA, an agency based in Pittsburgh.
“Some advertisers are swapping online and national cable for local. When you look at the cost comparison, it’s an easy move.”
Total spot spending fell from 4.84 billion in third quarter 2012 to 4.15 billion third quarter 2013, a loss of just over $685 million.
Loss of money from political accounted for just under half of that, $290 million.
Automotive advertising, the No. 1 ad category, slid 2.5 percent, to $901.7 million, after seeing mid-single-digit gains in first and second quarter.
The No. 2 category, communications/telecommunications, which saw double-digit percentage gains in the first half of the year, was off 11.8 percent in third quarter, to $370 million.
Roth says some advertisers in that category are concerned about saturation on local TV. There are so many ads from competing wireless carriers that viewers begin to tune them out.
“Spending did not go down, they just moved it to other areas,” Roth says.
Roth says the trend will likely continue in the coming year. While auto and telecom will still spend heavily on spot, cable and digital will be siphoning money that will lead to less-favorable year-to-year comparisons.
“There’s more programming in cable than there used to be, and it’s getting the ratings,” she says.
As for the No. 3 spot TV category, restaurants, the decline in spending likely does reflect an actual decrease in ad spending.
Restaurant spot spending fell by 8.3 percent in third quarter, to $300.8 million.
The category still hasn’t fully recovered from the recession, seeing declines for six straight quarters.
Spending by McDonald’s, the category’s biggest advertiser, rose by 13.5 percent. No other restaurant made the top 25 in spot ad spending.
Roth says it will be telling if restaurant spending drops again in fourth quarter.
“With casual dining, they run out of money at the end of the year sometimes. When sales are not as strong as they had wanted, and they have to drop some money from their bottom line, they pull back on advertising a little,” she says.
Source: Media Life Magazine, 1/10/14
