All Is Not Well With US TV Advertising

Family Watching TV

TV advertising seems to be fading fast in the U.S., according to the latest Standard Media Index (SMI) data. In 2014, especially in the last quarter of the year, TV advertising performed dismally. The reason for the lackluster performance of TV ads can be attributed to the shift to the Internet. Digital ad spending was up in 2014. TV broadcasters also made gains in their online advertising platforms.

October records biggest drop

During the last quarter of 2014, TV ad spending in the U.S. declined 2% from the same quarter a year earlier. The decline was greatest in the month of October where TV ad spending dropped 9%. November also recorded 6% drop in TV ad spending. However, things did not move up or down in December of 2014 as TV ad spending in the month remained flat from a year ago.

Gainers and losers

The fourth quarter also saw ad spending on cable networks declining 1.6% to $6.8 billion while national broadcasters recorded 2% in ad spending to $4.8 billion. Although overall TV ads declined in the fourth quarter, some stations made gains in the quarter. For example, TV ad spending in station such as NBC, CBS and Telemundo was up between 3% and 5% in the fourth quarter. However, TV ad spending was down between 2% and 12% for Fox, ABC and Univision in the quarter.

Computer and software cut TV spending the most

On the side of marketers, TV spending in the category of computer and software was down by 40% in the last quarter of 2014. Advertisers in the beauty and personal care category also dialed down their TV ad spending by 20%. Restaurants cut their TV ad spending in the quarter by 11%. However, categories such as consumer electronics, pharmaceuticals and clothing increased their TV ad spending between 14% and 24% in the fourth quarter.

US ad market stagnates

The lackluster performance of the TV market dragged down the overall U.S. ad market in the fourth quarter. Total ad spending in the quarter was flat compared with the previous year. However, ad spending in the whole of 2014 was up 6%, helped by the strong digital advertising segment.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.
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