TV advertising falls in Q2 — and with no end in sight

DetailsMichelle Clancy | 23 July 2015




Digital is beginning to take a big toll on the traditional video revenue model: television advertising fell 5% in Q2 2015 — and the road ahead doesn't look much better.


The standard media index (SMI), which tracks 80% of US ad agency spending, found that broadcast TV ad spending slipped the most, down 10%. Cable TV dollars fared better, only slipping 3%.

There are a couple of good reasons for the issue. June's overall numbers were negatively impacted on a year-on-year basis by last year's World Cup, for one thing. Last year, the men's FIFA World Cup soccer tournament generated more than an estimated $500 million in TV ad spending. To put that in perspective, when you take sports out, TV ad spending fell only 3% for the period.

SMI chief commercial officer James Fennessy said that the beautiful game is not the only culprit. "There are some underlying factors that are contributing to a deeper malaise," he said. "Soft ratings and ongoing measurement issues continue to impact television's results, and we also saw a slight slowdown in the explosive growth from digital, which points to marketers focusing more closely on return on investment."

Some industry-watchers also said that the future isn't exactly bright.

"While it's hard to know for sure how much the TV networks locked down in advanced ad sales this upfront season, most industry watchers expect this year's upfront to be at least as bad as last year's, when cable upfront commitments slipped and broadcast upfront sales fell at least 5%," reported the Wall Street Journal. "Ad buyers have said more marketers are holding back their TV dollars to buy ad time closer to the air date or shifting dollars to digital media."