- Digital spending is surpassing TV this year, but the TV ad market still has value although Bloomberg reports that ad buyers said they are tired of paying increasing prices for TV’s shrinking audience.
- As a counterpoint, CBS Corp., chairman and CEO Les Moonves said he expects a strong upfront TV ad season, stating during an earnings call, “We are looking at a year where we think it’s going to be much better than last year. And we had a very solid year last year,” per MediaPost.
- Q1 to Q1 comparisons found a 23% drop in CBS’s ad revenue, but last year included the Super Bowl 50 game and one more NFL playoff game. Taking those sports programming differences out of the equation found a much more modest decrease of less than 1% in Q1 2017 over Q1 2016 for CBS.
Part of Moonves’ case for a strong 2017 ad season relies on more advertising sold under a specific Nielsen metric – C7. Under that metric, networks get paid for TV programming viewed time-shifted on days four through seven after the live viewing. Last year CBS’ deals ran one-half C7 and the other half under the older C3 metric. Moonves said the network expects almost every deal to be C7 this year and that means “found money” since previously advertisers had been getting those days for free.
The singular challenge for TV is declining ratings overall. Cord cutting impacts the potential audience size, especially among valued younger demographics, and viewers simply have an amazing array of viewing options from streaming services like Netflix and Hulu, new cable alternatives like Google’s new YouTube TV and Hulu's new live TV service. Even social media platforms are getting into the TV and TV-like content game.
For linear TV, the problem is ratings have dropped 33% over the last four years, but ad prices have gone up 20% over the same time frame per ad-buying agency Magna. That is not a sustainable set of trends for TV ad revenue.