Local Broadcast TV Advertising Outlook
Steve Lanzano, TVB President & CEO
steve@tvb.org
Goldman Sachs 23rd Annual Communacopia Conference
September 11, 2014
2014 for Local Television Advertising
 Fundamentals are extremely strong
 Consumers credit TV as the primary media purchase influencer
 Advertising categories key to local TV growth are healthy
 Performance on all platforms are showing year-over-year gains
2
Nielsen: More People Are Watching TV Than Ever Before
Monthly Hours: Minutes
Watched Per Viewer 2+
159:07
157:32
155:46
2012
Source: Nielsen Cross-Platform Report Q1 Each Year
2013
2014
3
Watching TV at Home Captures the Lion’s Share of Viewing
Q1 2014: Weekly Time Spent A18+ (Hrs:Min)
33:59
86.4%
Time-Shifted TV
3:41
9.4%
Watching Video on Internet
1:31
3.8%
Watching Video on Smartphone
0:09
0.4%
39:20
100.0%
Traditional TV
Total A18+ Video Consumption
Source: Nielsen Cross-Platform Report
4
A Week in the Life for the Total U.S. Population
Q1 2014: Weekly Time Spent (Hrs:Min)
A18-24
A25-34
A35-49
A50-64
A65+
On Traditional TV
19:55
23:58
30:10
41:01
48:41
Watching Time-shifted TV
1:54
3:37
4:13
4:17
3:22
Using DVD/Blu Ray Device
0:57
1:34
1:18
1:04
0:39
Using a Game Console
3:48
2:49
1:14
0:25
0:08
Using the Internet on a Computer
5:29
6:12
7:30
5:59
2:55
Watching Video on Internet
2:28
2:11
1:45
1:12
0:23
Watching Video on a Mobile Phone
0:25
0:16
0:08
0:04
-
Source: Nielsen Cross-Platform Report
5
TV Remains The #1 Influencer Across All Segments of the Purchase Funnel
Source: TVB/The Futures Company; “Purchase Funnel 2012”
6
IAB Study on Consumer Influence:
Auto Intenders’ Vehicle Purchases are Influenced by All Media and Ads
Q. Which of the following media influences your CAR/TRUCK purchases?
31%
Auto Intenders
27%
24%
22%
Adults 18+
23%
21%
20%
21%
21%
17%
14%
14%
12%
12%
14%
13%
11%
8%
Broadcast TV
Read Prod. Article
Newspaper
Source: IAB Digital Influence on Auto Intenders, January 2014
Cable TV
Internet Ads
Magazines
Radio
Outdoor Billboards
All Other
7
Local TV Advertising 2014 Key Category Performance (Jan-Jun 2014)
Automotive Tier 1
+4.7%
National Political
+371.3%
Automotive Tier 2, 3
+5.9%
State/Local Political
+206.6%
Medical Insurance
+111.9%
Hospitals/Med Centers
Retail
+17.8%
+3.7%
Misc. Services/
Amusements
+7.3%
All Categories +3.9%
Source: Kantar Media
8
Double Digit Growth of Station Website and Mobile Ad Revenue
 Local TV Stations’ Digital Ad Revenue grew +15% in 2013
 Larger station groups are now selling digital services
including
 Search Engine Optimization
 Reputation Management
 Website Design
 Ad Placement (Outside The TV Station’s Site)
 Email List Management
 Many stations have branched out beyond their “owned”
media and are selling other media properties’ inventory
 Reseller and audience-extension programs now
account for 5% of digital revenues, a percentage
that’s on the rise
Source: Borrell Associates, Inc.
Digital Ad Revenue Growth
(Jan-Jul 2014 vs. Jan-Jul 2013)
Websites
Mobile
Local
+16.4%
NA
National
+34.1%
NA
Total
+18.2%
+21.6%
Local TV Stations Expected to Generate
$3 Billion in Digital Ad Revenue in 2014
9
Strong Political Spending for National and Local Elections
 Local Broadcast Television gets 85% of TV ad
dollars and the lion’s share of all media spending
on Political Campaigns
 Adults 35+, who comprise the majority of voters in
America (76%), spend only 3% of their monthly
video consumption time with internet and mobile
platforms
Broadcast is the
nuclear bomb.
 Kantar Media CMAG and Magna Global forecast
2014 political spot spending to reach $2.4 Billion
and $2.3 Billion, respectively
 2014 political ad spending from Jan-July is up
+259.6% versus the same period in the prior year
David Axelrod, Obama Political Consultant —
Source: TVB, Kantar Media CMAG, Magna Global, Nielsen Q4’13 Cross-Platform Report, U.S. Census Bureau: Voter Statistics, 2008 and 2010
10
Moving into the Fall Local TV Commercial Pricing is Solid
Change (%) in CPM A25-54
Year-Over-Year
(Q3 2014 vs. Q3 2013)
Quarter-Over-Quarter
(Q3 2014 vs. Q2 2014)
Early Morning
+2.0%
+4.0%
Early News
+4.0%
+2.0%
Prime Time
-2.0%
-1.0%
Late Night
+3.0%
+3.0%
Source: SQAD Media Market Guide
11
An Agency Perspective
 2014 Korn Ferry Marketing Pulse Survey
 “connect marketing efforts to tangible business outcomes…”
 “while customer engagement is critical and…a key focus…the overarching
purpose of… this engagement is to drive business results…”
 Strata Media Buying Agency Survey, Q2 2014
 “55% of clients say they are most interested in Spot TV…The largest
percentage in 22 Quarters of the Survey”
12
2014 Full Year Outlook
 More people are watching TV than ever before and consumer usage remains strong
 Average person A2+ spending nearly 160 hours per month with television
 Traditional Television represents over 86% of the weekly time spent watching video
 Local broadcast television is the most effective video platform in influencing and driving consumer behavior
 Advertising category strength is deep and diversified
 Return of political spending cycle, solid automotive performance, and increases in healthcare and retail
categories
 Local Spot pricing remains positive in 2H 2014
 Growth of local broadcast stations’ online and mobile offerings is driving rapid advertiser adoption resulting in
double digit digital advertising sales growth
 Broadcasters traditional television and digital media platforms offer the mass reach and targeting to advertisers
 Local TV stations expected to generate $3 billion in digital ad revenue in 2014
13
Thank you!
Local Broadcast TV Advertising Outlook
Steve Lanzano, TVB President & CEO
steve@tvb.org
Goldman Sachs 23rd Annual Communacopia Conference
September 11, 2014