[opendtv] News: Nets taking smaller piece of the advertising pie
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 29 Aug 2005 13:16:56 -0400
August 29, 2005 12:00am
Source: Advertising Age
If network TV's second quarter is any indication, its future growth
prospects are as flat as its screens.
A slew of separate industry data out last week showed ad revenue for
the period was flat to down on last year. While the Olympics and the
presidential election skewed comparisons with 2004, all trends point
toward the flattening of ad growth for the big broadcasters. Decline
is a distinct possibility in the longer term, too, and one report
suggested total TV spending will fall almost $1 billion this year.
What's more, TV's share of the marketing pie is shrinking. While
major marketers have spent more this year than in previous years-SEC
filings show General Motors Corp., Yum Brands, Colgate, Gillette and
Campbell Soup Co. all upping second-quarter marketing budgets-the
extra money isn't filling network TV companies' coffers.
Brian Wieser, Magna Global's director-industry analysis, said last
week when all the tallies are in, he expects the quarter will be up a
mere 0.2% for network TV as a whole. Media investment bank Veronis
Suhler Stevenson issued its annual Communications Industry Forecast
in which it predicts minor growth in ad spending for broadcast TV in
2005, just 1.9%. That report also projects that by 2009 broadcast
networks will see a decline in their overall share of the total
advertising pie from 22% in 2005 to 20.4% in 2009.
The Broadcast Cable Financial Management Association, which reported
actual TV network revenue last week, said ad revenue for ABC, CBS,
and NBC were down 1.8%, from $2.9 billion in the second quarter 2004
to $2.85 billion for the second quarter 2005. (Fox does not report
its numbers to the industry body.)
Also chiming in was the Cable Advertising Bureau-which compiled
figures provided by PricewaterhouseCoopers, National Cable TV
Association, Universal McCann, Veronis Suhler Stevenson and Wilkofsky
Gruen Associates-predicting total broadcast spending this year will
drop $800 million to $18 billion while network cable will rise from
$13.6 billion to $14.8 billion over the same period.
SLOWDOWN FACTORS
The broadcast upfront for the 2005-2006 season also saw a fall-off
from last year. Estimates of advertisers' commitments put the drop
off at between $100 million to $300 million to $9.1 billion.
Veronis cited ad-skipping technology and increased competition from
cable and the Internet as factors in slowing growth rates. Total
spending on broadcast TV will rise from $43.1 billion in 2004 to
$43.9 billion by the year end. Another reason broadcast TV will be
hard pressed to grow: Pharmaceutical and food marketers are facing
government pressure to change advertising tactics, and most experts
expect that will prompt these players to cut broadcast TV ad spending.
Veronis predicts the consumer Internet segment will increase its
share of overall ad spending from 6.3% to 10.8% by 2009. Ad spending
on the Internet is expected to rise from $9.6 billion in 2004 to
$12.6 billion in 2005, a much faster growth rate.
<<Advertising Age -- 08/29/05>>
<< Copyright ©2005 Crain Communications Inc. >>
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