Linear TV ad spend plunges while digital broadcast surges

Despite mounting political campaigns in the lead up to the Midterm Elections, advertising spend in broadcast declines while growth in radio remains flat and digital broadcast increases heavily, according to Matrix Solution's mid-year report.

The U.S. endured a .35 percent year-over-year contraction across broadcast, digital broadcast and radio platforms in Q2, according to a new report.

This figure comes despite the emergence of political advertising spend in primary Democrat and Republican elections, which has seen a 264 percent growth rate. When excluding political ad spend from the findings, broadcast, digital broadcast and radio saw an overall 4.90 percent contraction compared to this time last year.

The findings, from Matrix Solutions’ 2018 Midyear Ad Spend Report, are the latest comprehensive update on the state of the advertising spend ecosystem. It derived from the activity of more than 10,000 active users within media ad sales teams from January 2018 to June 2018.

"According to our data, overall ad spend throughout the year, to date, has remained relatively flat when including the buoyancy that always comes from political campaigns, and without there’s a clear contraction," said Mark Gorman, CEO at Matrix Solutions.

"It’s a trend that’s continued from the findings of our 2017 Ad Spend Report, which means for these traditional platforms, they need to better arm themselves to grab a larger slice of the overall advertising spend pie to remain competitive. The advertising industry is in constant flux, and understanding these trends can help media ad sales teams better anticipate how brands are investing in traditional media platforms to inform their own strategies and priorities."

Advertising spend by platform

Broadcast
When excluding political ad spend, overall media ad sales in broadcast experienced a contraction rate of 5.86 percent and remains mostly flat with a slight contraction rate of .83 percent when including political ad spend

Key industries of growth in broadcast include services (4.98 percent), travel and leisure (2.56 percent) and financial services (2.26 percent).

Notable areas of decline in broadcast include grocery and food Items (21.54 percent contraction rate), restaurants (19.68 percent contraction rate), automotive and auto-related (12.51 percent contraction rate) and health and beauty (11.77 percent contraction rate)

Digital broadcast
This area is booming -- media ad sales grew across nearly every category at an average rate of 13.21 percent when including political ad spend, and at 13.03 percent when excluding political.

Key industries of growth include financial services (23.09 percent), services (20.71 percent), home improvement (16.03 percent), entertainment (24.01 percent) and medical (10.46 percent).

Notable areas in decline include trade organizations (19.10 percent contraction rate) and automotive and auto-related (2.12 percent contraction rate).

Radio
Radio’s growth is flat in comparison to last year, with a slight contraction of .38 percent when excluding political ad spend. When factoring political, that figure slightly jumps but growth remains flat at .06 percent.

Key industries of growth include services (21.05 percent), retail (19.31 percent) and financial services (17.49 percent). Most significant declines are in travel and leisure (37.27 percent contraction rate), health and beauty (31.64 percent contraction rate), automotive and auto-related (22.5 percent contraction rate) and entertainment (16.82 percent contraction rate).

Advertising spend by industry

The following categories were key areas of growth across broadcast, digital broadcast and radio: services (6.62 percent growth); financial services (5.16 percent growth) and; home improvement (.54 percent growth).

But three categories stood out as enduring decline across the three platforms in the U.S.: automotive and auto-related (27.15 percent contraction); grocery and food (19.49 percent contraction) and restaurants (18.53 percent contraction).

Overall, local advertising is down with a 2.89 percent contraction rate, but national ad spend is surging with a growth rate of 4.69 percent. When excluding political ad spend, local continues to be down at a 3.25 percent contraction rate, with national at a contraction rate of .77 percent, demonstrating flat growth at a national level without a political factor.

Methodology
Matrix Solutions looked at $11 billion worth of media ad sales deals to see which categories and platforms were most popular across the media ad sales industry in the United States -- normalizing each category across more than 10,000 unique active users in broadcast, digital broadcast and radio. Data was captured from January 2018 to June 2018.

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