TV ratings are down. Does it matter? No.
What really matters is that advertisers still think TV really works
By Bill Cromwell
July 13, 2015
‘Modern Family’ was one of several top broadcast shows that saw TV ratings fall sharply last season.
TV ratings have been falling for years, and of late that slide has become even sharper.
During first quarter this year, viewership among adults 18-24 fell a stunning 18 percent.
You’d think this would be causing advertisers to rethink their TV budgets, as they look for those lost viewers through other media.
You’d be wrong.
A new report from Pivotal Research Group delves into the relationship between TV ratings and advertising and finds that, despite the increasing declines for TV ratings, it’s not hurting the medium’s standing among advertisers.
In fact, predicts Pivotal, TV advertising will continue to grow over the next few years, in contrast to several other recent forecasts from Magna Global and ZenithOptimedia.
Senior research analyst Brian Wieser says the ratings declines do not matter as long as TV works better than any other medium in achieving advertisers’ goals.
“If TV audiences fall by 5 percent or even 10 percent but a) 90 percent of a target population still watches TV vs. 80% of that population consuming content over the course of a campaign flight, and b) there is substantially more palatable inventory on TV, and c) all of the TV inventory is sight-sound-and-motion vs. substantially less online, then TV still gets the lions’ share of a budget for a brand focused on awareness,” Wieser tells Media Life.
Wieser notes that among the 100 biggest advertisers, spending on TV has remained at about the same level since 2010. It accounted for 36 percent of all spending five years ago, and 2014’s spending was up slightly from the previous year.
By contrast, rating have fallen across the two biggest TV subcategories since then, broadcast and cable.
But clearly it’s not hurting future spending, either.
Wieser forecasts total TV ad spending, including broadcast, cable, syndication, Spanish-language and spot, will hit an all-time high of $42.65 billion this year, up from $42.16 billion last year, despite the fact that 2014 was an Olympic and election year.
By 2019, spending will hit $48.01 billion on TV, growing steadily each year.
Wieser acknowledges that digital has drawn away a very small percent of TV dollars, but insists that’s not as big a problem as other forecasters have made it out to be.
In fact, Wieser says, a bigger threat to TV ad spending isn’t falling ratings but rather the lack of new advertisers looking to get onto TV, which will inhibit the category’s further growth over the next four years.
“The issue is that there are no clear new categories of marketers that might show up to drive growth,” he says.
National TV Spending
|% of National Advertising||59.3%||59.8%||60.5%||59.1%||58.1%||56.8%||56.0%||55.1%||54.7%||54.1%|
|Source: Pivotal Research|