The television ad market in 2016 saw a 4.4 percent revenue increase over 2015 thanks to the Summer Olympics and the election, according to new data from Standard Media Index.
Broadcast revenue jumped 4.6 percent, while cable was up 4 percent. But when sports-related revenue, which increased 16 percent due to the Rio Olympics, is excluded from the tally, TV was only up 1.4 percent. (Cable grew 3.9 percent, while broadcast was down 2.4 percent.) The elections also boosted last year's ad revenue, driving the news genre to a 14.1 percent increase in ad spending over 2015.
According to SMI, which tracks 70 percent of national ad spending from global and independent agencies, NBC had the biggest ad revenue increase of any broadcast network (20 percent) thanks to the Summer Olympics and the five NFL games it added via this season's new Thursday Night Football package.
CBS was up by 3.2 percent—it had the Super Bowl but lost those Thursday Night Football games to NBC)—while ABC fell 2.2 percent, Fox was down 4.6 percent and The CW increased its revenue 6.3 percent.
On the cable side, the election resulted in big ad revenue bumps for all of the news networks. CNN saw a 57.8 percent increase, while Fox News was up 25.7 percent and MSNBC soared 47.9 percent.
Several non-news channels saw big ad increases year-over-year as some viewers sought out alternatives to election coverage, including HGTV (up 13.6 percent), Bravo (13.7 percent), Discovery Channel (7 percent) and Food Network (4.6 percent). The biggest ad revenue drops among the top 15 cable networks included two networks that Viacom's new CEO Bob Bakish is trying to turn around—Comedy Central (down 13.6 percent), and MTV (a 12.3 percent drop)—along with History (9 percent), AMC (7.6 percent) and Freeform (4.4 percent).
SMI noted that several big brands moved their ad spending from digital back into TV last year. Paramount Pictures increased its TV spend by 24 percent, after decreasing it by 3.8 percent in 2015. Target dropped its TV spending by 20 percent in 2015 but increased it by 12 percent in 2016. And Progressive Insurance, which had decreased TV ad spending by 5.5 percent in 2015, increased to 6.2 percent in 2016.
The largest spending increases by category in 2016 included quick-serve restaurants (16.5 percent), household supplies (16.3 percent) and alcoholic beverages (15.4 percent). The biggest year-over-year decreases came from travel, tourism and hospitality (down 14.8 percent), and toys and video games (down 10.3 percent).
In the fourth quarter of the year, the overall TV market was up 2.4 percent, with broadcast down 2.2 percent and cable up 7.4 percent. Over the quarter, NBC's ad revenue increased 7.3 percent, CBS fell 12.4 percent, Fox jumped 2.9 percent and ABC dropped 9.6 percent.
Makegoods eat into NFL revenue
With all data now in from the NFL regular season, SMI found that the average regular-season cost of an NFL ad across all networks was up 6 percent over 2015, from $471,017 to $499,095. NBC's Sunday Night Football had the highest average cost at $614,972, up 6 percent from the previous year. Of the three broadcast networks, CBS' Sunday afternoon games had the lowest price tag at $406,405, but even that represents a 4 percent increase from 2015.
Even though the average cost of an NFL spot jumped 6 percent, overall revenue for all networks that aired NFL games except for the NFL Network was up just 1 percent, due to an increase in audience deficiency units, or ADUs (also known as makegoods), for advertisers that didn't receive their guaranteed impressions earlier in the football season. SMI's previous data showed that plunging football ratings led to 17 percent drop in NFL ad revenue year over year in November.
CBS' NFL ad revenue fell 13 percent versus 2015, due to the partial loss of the Thursday Night Football package to NBC, which, accordingly, jumped 17 percent in revenue. Fox was up 2 percent, while ESPN was down 4 percent in NFL ad revenue.