Marketers may not increase their ad budgets as much as some analysts expected for 2013. Magna Global analysts believe that the slow economic conditions may result in only a 1% boost in the ad market overall. For TV, the outlook varies by sector.
In adjusting projections for TV advertising, Magna Global analysts point to the contrasts in this media format. National TV network (for the English-speaking market) increased 2.2% in 2012, when the Olympics are excluded. National cable, which is growing as a percentage of the total TV market, had a 5.1% increase in 2012. When broadcast and cable are combined, the national market TV market rose 2.4% last year.
These analysts are expressing caution for this year, saying “national television is the category we have revised most significantly, down to +2.1% from +4.8% in October.” Most of the caution is linked to weaker demand. They predict national network will experience a drop of 6.4% (excluding the effect of Olympics and politics) and while national cable, gaining share from broadcast, will grow 4.0%.
In election years, local TV revenues soar because of the related political advertising. 2012 was no exception. Even without the political and Olympic ad revenue, the local market grew 1.5%. Auto-related advertising is one reason for the health of the local TV ad sector which reached $19.8 billion last year. For 2013, analysts predict that local television ad revenues should increase 1.4%.
Taking all parts of the TV ad market into account, Magna Global analysts foresee a 3.0% drop in 2013. This environment is likely to make media sales very competitive.[Source: 2013 to See Local, Network Rev Decreases. Tvnewscheck.com. 18 Jan. 2013. Web 28 Jan. 2013]