The TV ad business may be off to a slow start, but major broadcasters are expecting a small increase in core business for the year. TV stations can’t count on the kind of boost they had from political advertisers last year, but they do have other revenue sources they can increase. In an article for TVNewsCheck, Dave Seyler summarized where TV stations expect to make their best ad sales this year.
Most major broadcasters concede that the national advertising scene has been weak so far this year. In some cases, big insurance companies are not doing the extensive buys they were making last year. In other cases, the revenue from auto manufacturers has been lower. Some analysts expect automotive ad buys may be lighter this year in general as auto sales will be ‘flattish.’
On the other hand, TV execs are optimistic about the impact of the Trump administration. The slow start to 2017 can partly be blamed on the general uncertainty of the business climate that accompanies any new administration. It’s becoming clearer now that businesses may have a lower till bill to pay as the year goes on. If that’s the case, marketers may feel better about increasing their advertising efforts.
To offset the sluggish growth in advertising, TV stations will be counting higher revenue from retrans contracts. As stations get more active with OTT services, retrans revenue will grow.
TV station owners note that marketers are also slow to make their ad buys, often waiting until this last minute this year. This hesitancy makes forecasting the outcome of any quarter in advance particularly challenging. The bottom line for the TV ad market is that analysts are expecting about a 1.3% increase in core (the market that excludes the political ad sector.) While some sectors like food and retail were slow in Q1 this year, industry veterans believe local spot revenue for many stations will increase and the best areas for sales reps to focus on may be services and telco. Because local markets conditions vary greatly, TV stations shouldn’t count out auto dealerships, either.
To sell more TV advertising, reps should pay attention to local economic trends and the types of businesses that are opening. These are the prospects that represent new business as they need to reach consumers in the local market.