Ad Market Remains Flat in April; Digital Media Surges; OOH Up

In April, the overall market rose by 1% on a year-over-year basis, thanks largely to the digital sector, whose healthy +21% increase propelled the market to land in the black. SMI’s data shows digital ad revenues rose across the sector, attracting big gains in social media (+70%), video (+44%), ad networks/exchanges (+35%) and Internet radio (+32%).

Television declined by -6% for the month, led by declines in broadcast (-8%) and cable (-7%). Both spot and local TV deliver mid-single digit increases which helped the overall sector’s performance.  CBS and ABC were the best performing broadcast networks, delivering similar results to those achieved in 2014. On the cable side, Discovery was the stand-out performer, growing by more than +17% against the same period last year. Food Network and HGTV also did well with solid single digit gains.

SMI’s data shows the big advertising categories that have changed their mix of spend this year continue to be CPG, retail and financial services. All three of these categories have shifted dollars away from television and have been recording significant double-digit growth on digital spend.

Scatter volumes were up in TV but pricing was not co-operating. Broadcast scatter volume jumped by +18% in April and cable grew a more modest +5%.  Observing broadcast year to date figures, scatter spend on broadcast is up +19% and cable has grown by +16%. Unfortunately, both of these increases are not enough to make up for the pull-back in Upfront dollars we have seen, causing the ongoing softness in the TV market.

In other major media, newspapers continued to fight back, putting on a +1% increase for the month. Magazines face a tough battle and lost -4% in ad dollars on a year–on-year basis. SMI’s numbers showed OOH enjoyed strong single digit gains, but the news wasn’t so good for radio, which shrunk by -12% for the month.

Four months into the calendar year, SMI’s data delivers a great picture on the health of the overall ad market. The total market is up just 1% on a YOY basis. In the year to date, digital leads the way, growing 22%. Broadcast TV is off -11%, due mainly to the absence of the Winter Games revenue from 2014. Cable, also impacted here, has managed to stay flat on the same period last year. Magazine revenues have declined by -6%, newspapers are off by -1%, and radio is down by -3%. OOH has joined digital as the only positive growth story of the year so far, with its +3% rise for the first four months of the year.

The ongoing Upfront negotiations will show us whether the trends we have seen over the first four months of the year are systemic, or likely to be reversed, as traditional media owners look to bring new solutions and killer content to audiences and brands. We look forward to reporting on whether May results bucked the trend in two weeks’ time.

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