Cable, Syndicated and Spot TV Share Bright Outlook
Both the U.S. and the world ad market are set to enjoy solid growth rates in 2013 and 2014. While ZenithOptimedia just cut its forecast again for this year’s growth rate, to 3.8%, the firm recently highlighted the formats that will generate the most activity going forward. In addition to the expected expansion of online advertising, the firm sees a shift underway in the world of TV advertising.
The U.S. ad market should grow by 3.6% in 2013 and 4.4% in 2014. Spending on the Internet/mobile sector will jump 17.9% this year alone and the format will likely own the top growth rates in the subsequent 2 years. But for now, TV still commands the largest share of advertiser funds.The TV market is changing though and ZenithOptimedia expects broadcast TV revenues to drop 1% in both 2013 and 2014. Part of the problem is linked to advertisers refusing to shell out big bucks for the upfront season. Key players like General Motors complained that the upfront pricing was too expensive and they intend to buy more last minute advertising in the scatter market. Broadcast TV may also be suffering from audience erosion as consumers look for quality programming on cable.
Cable TV operators will bring in 7% more ad revenue in both 2013 and 2014. These increases mean cable will pull in 34% of all TV ad spending, more than network TV. And after Spot TV’s 12% jump this year, analysts see increases of 3% in 2013 and 4% in 2014. The interest in Spot TV will shift from politicians to car dealers. Now that consumers are ready to buy, tier 1, 2, and 3 dealers are promoting incentives and packages and they are doing so in local TV markets. The syndicated TV format is also expected to grow by 1% in 2014. Both comedies and talk shows perform well here, especially in the 18 to 49 year old demographic that marketers are anxious to reach.
Based on ZenithOptimedia’s view of the world, it seems that marketers will still be buying TV in the next few years but they may change the kind of TV they’re spending money on. As a result, TV media companies may adjust their offerings to remain attractive and to increase revenue.[Sources: Marcucci. Carl. Global ad spend to grow 4.6% in 2013. Rbr.com. 1 Oct. 2012. Web. 9 Oct. 2012; ZenithOptimedia cuts 2012. Reuters.com. 30 Sept. 2012. Web. 9 Oct. 2012]