Ouch: Broadcast takes hit from NFL makegoods
Spending falls 10.6 percent in November as the networks scramble
December 21, 2016
It was bound to happen.
With the steep declines in NFL ratings this fall, the networks were going to have to start issuing makegoods to advertisers at some point.
That point came in November, and broadcast advertising took a hit as a result.
Spending fell 10.6 percent compared to last year, according to new data from Standard Media Index, which tracks 70 percent of national agency spending and models the rest based on trends.
It found that, without the NFL included, spending would have risen.
“Poor football ratings earlier in the season, combined with fewer games this month, finally caught up with the major broadcasters, whose revenue dropped more than 10 percent in November as they were forced to give inventory back to advertisers,” says SMI CEO James Fennessy.
“Without sport, the major networks were slightly up as major retailers moved big money back into TV after some questionable experimentation with digital last holiday season.”
Overall, the networks aired four fewer NFL games in November than last year, because of a calendar anomaly last year that gave the month five Sundays compared to four this year.
But SMI says the makegoods were the major reason for the spending declines.
One in five NFL ads on the network last month were makegoods, compared to one in 20 last November.
CBS revenue slid 26 percent, and it doubled the percentage of makegoods from last year. That also included one fewer game than last year.
Fox’s ad spending took the biggest hit, down 34 percent, though that was largely due to a three-game decrease in November versus last year. Still, the percent of inventory given over to makegoods grew from 20 to 25 percent.
Overall, SMI calculated the average price of a 30-second spot in a broadcast game last month cost $590,060, or about $134,000 more than in October.
That’s largely because of the Thanksgiving day games, which all pulled a much higher-than-average price, ranging from just over a million on Fox to $860,000 on CBS.
Other media spending
Broadcast’s struggles led to a down month for advertising. Across all media, spending fell 1 percent, even with the final days of election money included.
SMI notes that last November was particularly strong, making for difficult comparisons.
Still, digital’s gains were less than usual, up just 3.4 percent, in part due to big pullbacks on spending by department and consumer electronic stores.
Print continued to suffer, with magazines dropping 10.6 percent and newspapers down 18.9 percent.
Even out of home (off 14.6 percent) and radio (off 8.7 percent) had rough months, and they’re usually the steadiest of the traditional media.
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