Ratings Slump Dings Broadcast Sales

Networks’ Q1 spend slips 5 percent; cable on the rise

Diluted prime-time deliveries and a calendar quirk that moved NCAA Final Four dollars into April contributed to a $317 million decline in first-quarter broadcast TV ad expenditures.

According to a new report from Kantar Media, clients in Q1 invested $5.77 billion in network TV time, down 5 percent from $6.09 billion in the year-ago period.

Prime-time ratings in the 18-49 demo plummeted 17 percent in the first quarter of 2013, marking the sharpest rate of decline for the period since Nielsen began measuring TV deliveries.

Also not helping matters was a shift of March Madness dollars to Q2. Whereas the 2012 Final Four took place on March 31, this year’s semi-finals were broadcast on April 2. That alone moved as much as $75 million in ad sales revenue into the April-June quarter; the going rate for a 30-second spot in CBS’ 2013 Final Four coverage was around $700,000.

Per its most recent earnings report, ratings champ CBS saw its Q1 ad sales revenue jump 8 percent. NBC said it grew sales 3 percent, while ABC and Fox each reported a drop in ad sales revenue.

As broadcast lost its footing (a year ago, the networks saw ad spend grow 7 percent), cable reaped the benefits of increased ad inventory and heightened demand from the automotive and restaurant categories. Per Kantar, cable sales grew 5 percent to $6.22 billion.

A handful of top-tier networks had more available GRPs to sell in Q1, and dollar volume shifted accordingly. According to Nielsen, FX grew its 18-49 deliveries 16 percent to 913,000, while The Walking Dead helped AMC improve its draw of the dollar demo by 35 percent (765,000).

Discovery Channel saw its Q1 prime-time ratings grow 5 percent to 760,000 adults 18-49, while Turner’s Adult Swim was up 15 percent to 754,000.

Among the top 20 cable nets, the most severe losses were registered by MTV, which fell 26 percent in the 18-34 demo, and Food Network, down 19 percent among the 18-49 set.

Spanish-language ad spend increased 14 percent to $1.37 billion, marking the segment’s seventh consecutive quarter of double-digit growth. In the space of the last two years, Q1 Hispanic TV spend has skyrocketed 34 percent from $1.03 billion.

Syndication dipped 1 percent to $1.27 billion. All told, TV spend was flat versus the year-ago period, adding up to a sum just shy of $18 billion. This marks a not-insignificant change from Q1 2012, when overall TV bookings were up 8 percent.

TV accounted for more than half (60 percent) of the $30.2 billion invested in media over the course of the first quarter.

Spending patterns were generally consistent, as magazines slipped 1 percent, newspapers were down 4 percent and outdoor was up 4 percent. (Kantar did not include data for Internet display ad spend.)

“It has been a lackluster start for 2013, with flat year-over-year results due in part to strong 2012 growth caused by political and Olympic ad spending,” said Jon Swallen, chief research officer at Kantar Media North America. “Data from the early second quarter are mixed, suggesting marketers are still being cautious and conservative with ad budgets. However, there are some bright spots, including healthy growth for Hispanic media and outdoor.”

Spending among the 10 largest advertisers increased 6 percent to $3.74 billion. Procter & Gamble once again led all comers with $722.5 million in media buys, an increase of 9 percent from $662.1 million in Q1 2012. AT&T drastically upped its spend (28 percent to $463.5 million), as did L’Oréal (25 percent to $394.6 million) and Ford (up 13 percent to $280.3 million). The biggest reduction in spend was made by Comcast, which curtailed its media budget by 18 percent, or $70.1 million, to $331.2 million.

Expenditures for the 10 largest categories grew 1 percent to $19.6 billion. Automotive was the top category with $3.35 billion in media spend, down 1 percent from Q1 2012. The No. 2 category, retail, upped its investment 1 percent to $3.17 billion, while telecom demonstrated the biggest year-over-year increase, laying down $2.07 billion in measured media—a 10 percent uptick.