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TV Ad Spend Continues Migration to Digital Formats
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TV Ad Spend Continues Migration to Digital Formats

Budgets for TV advertising appear to be on a further decline as digital formats took an even greater chunk of marketer spend during April.

Readings courtesy of Standard Media Index (SMI) - which captures 80% of US ad agency budgets - show a 5% dip in TV ad revenue last month compared to a year before. Print and newspapers only managed a 1% uptick in ad revenue, while radio reported a decline of 12% during April.

The US ad market was allowed to rise 1% for the year to April - a movement which owed much to the 21% rise in digital ad spend year on year, aided by marketers’ demand for inventory linked to social media and online video. 

The pair saw growth of 70% and 44% respectively for the year, playing very much into the hands of the ad tech industry.

James Fennessy, SMI’s chief commercial officer, says the data reinforces beliefs that traditional spend is becoming victim to experiments on digital.

TV endures slump

In terms of ad spend by vertical, it was a tale of curbing back on TV and committing more to digital formats.

The biggest decline was seen across the food sector (-14%), followed by companies within retail (-12%) and financial services (-4%).

All three saw double-digit growth in their digital ad budgets, though, as the year to April confirmed what many have been saying about the web’s snatching of TV ad spend.

Broadcast TV operators saw an 8% decline in their revenue, although SMI data had CBS and ABC returning similar figures for returns during April. The Discovery Channel was one of the better performers on cable, growing 17% in the month to April, but this failed to combat a 7% decline for cable in the same period.    

But all is not lost, according to SMI’s Fennessy, as a number of companies will be well-positioned for the decline in spend for TV. 

“We see large traditional TV advertisers, like retail and financial services, move significant dollars into digital at the expense of their television spend. 

“The encouraging news for content owners and creators is that a lot of this money is finding its way into digital video as advertisers look to align their brands with premium content.”

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Richard Towey

Richard Towey

Richard serves as head of content at PerformanceIN. After many years spent covering developments from the automotive, sports, travel and finance sectors, he eventually turned his full attention to reporting on stories from the fast-evolving world of digital marketing. Richard now heads up the editorial team at PerformanceIN: the performance marketing industry's leading publication.  

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