The U.S. advertising market climbed 3.7 percent in 2017, reports advertising intelligence firm Standard Media Index. The company reports that digital led the growth, up 11.9 percent year over year, while cable and broadcast television dropped 2.4 percent and 3.9 percent, respectively. Standard Media Index has also released data on performance in December and fourth quarter 2017.
“Heading into 2018, ad spend in national television is trending positively while digital’s growth continues to slow,” says Standard Media Index CEO James Fennessy. “National television declined in 2017, but that is almost entirely due to the Olympics in 2016. We see national brand advertisers paying really high CPMs for quality drama and sports programming, despite falling audiences. This speaks to the power of TV to reach audiences with their brand message via a full screen experience with no fraud.”
A number of downturns in 2017 can be attributed to 2016’s Olympics-fueled performances. NBC declined 15.5 percent in 2017. Excluding the Olympics, NBC would have been up four percent for the year, and the overall national TV market would only have declined one percent. Similarly, across all platforms, sports programming declined 12 percent. Excluding the Olympics, sports declined 1.3 percent year over year.
With the exception of Twitter (-11.8 percent), all the major social network sites delivered growth in 2017. Facebook—including Instagram—posted 40.5 percent growth in U.S. ad revenue, and Snapchat closed the year at 51 percent growth after tremendous growth in the first two quarters of the year and a marked deceleration in Q3 and Q4.
Looking at advertiser categories across national TV, the auto industry (-13 percent), prescription pharmaceuticals (+ eight percent), and food, produce and dairy (- four percent) had the largest spend in 2017. The travel industry (+16 percent) and non-alcoholic beverages (+10 percent) led the market growth year-over-year. Meanwhile, the top declines were from entertainment (-16 percent), autos (-13 percent) and telecom (-12 percent).
In December 2017, the total advertising market was flat. Digital rose six percent in the month compared to December 2016. Social media and digital content sites saw the largest increases at 23 percent and 12 percent, respectively. Additionally, December saw a 16 percent increase in out-of-home (OOH) with a decline of nine percent in radio. National Television ad spending rose 1.1 percent year-over-year in December 2017 with a 1.9 percent increase in cable and 0.1 percent increase in broadcast.
Throughout the fourth quarter, the overall ad market continued its positive trend, rising 4.4 percent compared to fourth quarter 2016. National television fell 0.1 percent with a 0.4 percent decrease in cable and a 0.5 percent increase from broadcast. In fourth quarter, digital and OOH carried the overall market, each with a 10 percent increase year over year. Radio was up one percent. Digital, search, content and social all saw double-digit growth. TV network digital was close behind at nine percent growth for the fourth quarter compared to 2016. Ad spend on internet radio continued to grow, with a five percent increase in fourth quarter 2017 versus fourth quarter 2016.