The sugar rush of last year’s Summer Olympics and political spend has given way to the inevitable crash, as third-quarter advertising expenditures were down significantly from Q3 2012.
According to a new report from Kantar Media, overall Q3 TV spend dipped 6 percent to $17.2 billion on unfavorable comparisons to the year-ago July-September period. Broadcast TV took the biggest hit, dropping 18 percent to $4.18 billion. Predictably, spot TV also took its lumps, falling 15 percent to $3.8 billion.
“Comparisons against Q3 of 2012 are skewed by last year’s record-breaking Summer Olympics and political campaign ad spending, which artificially boosted the market,” said Jon Swallen, chief research officer at Kantar Media North America. Swallen added that the London Games and the presidential and local elections injected “more than $1 billion in incremental money into the TV marketplace.”
Of course, the broadcast marketplace as a whole did not directly benefit from the huge cash infusion provided by the Olympics. NBC booked north of $1 billion in ad sales for the 2012 London Summer Games, a haul it sweetened with another $300 million in affiliate and digital revenue.
(While the Winter Olympics don’t have quite the impact of the Summer Games, NBC expects to make a profit on Sochi, for which it paid a $775 million rights fee. Earlier this fall, NBC Sports evp of sales and marketing Seth Winter said NBC already secured a record $800 million in Sochi sales.)
As Swallen notes, advertising driven by the Olympics, other sports programming and elections accounts for a steadily increasing share of TV sales. Whereas these categories accounted for $12.8 billion, or 19 percent, of the estimated $68.4 billion in overall TV sales in 2008, last year’s incremental spend accounted for 22 percent of the total TV take—a hearty $16.8 billion wedge of the $75.2 billion pie.
National cable networks aren’t nearly as in thrall to the Olympics and political eddies. Per Kantar, cable was up 5 percent to $6.24 billion. Pricing increases and an ongoing inflation of hourly ad time contributed to this increase.
Spanish-language TV is also largely unaffected by the incremental spend, as Univision, Telemundo and other outlets combined to rake in $1.72 billion in Q3 sales, up 10 percent from the year-ago $1.56 billion.
Syndication was effectively flat at $1.26 billion, down just $6 million versus Q3 2012.
Foregoing the apples-to-hand-grenades comps to 2012, the two-year differentials are much more encouraging. When compared to the last non-Olympic, apolitical Q3 (2011), broadcast is up 7 percent from $3.92 billion, while spot TV spend improves 2 percent versus $3.72 billion. And, as one might expect, cable’s steady growth is reflected in similar comparisons. When positioned against a Q3 2011 haul of $5.73 billion, ad-supported cable is up 9 percent.
All told, U.S. ad expenditures for the quarter were down 2 percent to $34 billion. TV accounted for more than half (51 percent) of that figure.
For the first nine months of 2013, perennial big spender Procter & Gamble was once again the top-ranked advertiser, with measured spending of $2.39 billion, an increase of 16 percent from the year-ago period. Per Kantar, P&G’s spending hikes were broadly distributed across its brand portfolio.
AT&T was the second largest investor in measured media, upping its year-to-date ad budgets by 22 percent to $1.4 billion. Rival Verizon reduced its total expenditures by 15 percent, to $865.4 million. According to Kantar estimates, the spending gap between the two telco giants is now at its widest margin in a decade.
Two automakers made the top 10 list, as General Motors increased its media spend 4 percent to $1.2 billion and Toyota dipped 1 percent to $920.4 million.
When taken as a whole, the top 10 advertisers spent $11.8 billion between Jan. 1 and Sept. 30, up 6 percent from last year’s $11.1 billion.