TV ad spending on the rise

Television advertising spending is showing signs of a revival in a timely reminder of why Fairfax is selling itself to Nine.

Think TV CEO Kim Portrate. Picture: Hollie Adams

Television advertising spending is showing signs of a revival in a timely reminder of why Fairfax is selling itself to Nine.

Ad-spending in the free-to-air market increased 3.81 per cent to $1.36 billion in the six months to June, according to the latest KPMG figures, a big reversal from the past few years.

Demand for ads at the Seven, Nine and Ten networks rose 2.53 per cent to $2.86bn in the twelve months to June, suggesting the broadcasters could be poised for a surprisingly strong showing as they get close to negotiating annual agency-volume deals for 2019 with media-buyers.

After a wobbly start during the first six months of the 2018 financial year, Seven recovered lost ground this year on the back of stronger ratings to win the biggest share of ad dollars in the second half with a 39.91 per cent share of the free-to-air ad market.

The result shows the momentum is with Seven despite a rejuvenated Nine, which took a 37.04 per cent share in the six months to June. Ten finished third with a 23.05 per cent share.

Although Nine faded away in the most recent half amid the shock collapse of last year’s breakout hit Ninja Warrior, the network will seize on a better performance across the full financial year.

Nine ended the period with a 38.6 per cent share, with Seven in second place on 38.1 per cent and Ten closing the financial year with 23.3 per cent.

Free to air ad market share

Television executives said the industry is back in vogue as some advertisers who have made big bets on digital return to broadcast quality content because the return on their investment didn’t live up to expectations.

Marketers are concerned about digital advertising issues including the viewability of ads, fake traffic and ads appearing alongside inappropriate or extremist content on Facebook and Google’s YouTube.

“This highlights the strong support and confidence of TV and broadcaster video-on-demand (BVOD) to build brands and create outcomes,” Seven West Media’s chief revenue officer Kurt Burnette told The Australian.

“It also talks to the swing back to a more balanced strategy of brand building for advertisers, not just short term performance outcomes. TV is still the fastest and most effective way to build reach and trust in a brand safe environment.

“No-one takes that for granted and TV will continue to work with customers and stakeholders to ensure TV in all its forms continues to create tangible outcomes for advertisers.”

ThinkTV’s chief executive Kim Portrate said television remained resilient even as ad-free streaming services such as Stan and Netflix continue to attract new subscribers and audiences fragment.

“Advertisers and agencies are increasingly recognising that the premium content that powers multi-platform TV provides gives their brands and business a powerful advantage in today’s increasingly competitive environment,” she said.

“Moreover, nothing beats TV for reach, scale or return on investment — and all in a brand safe environment — so these results are very pleasing.”

Including subscription-TV provider Foxtel, the total TV ad revenue market gained 1.8 per cent to $1.98bn for the six months to June, and 0.5 per cent to $4.15bn on a full-year basis.

Brands also increased their ad spend commitments to new internet-based video services offered by all three commercial networks and Foxtel as they claw back ad dollars siphoned off by online alternatives.

BVOD revenues were up 40.5 per cent to $50 million for the six months to June, and 32.38 per cent to $92.8m across the full financial year.

Nine’s commercial director Pippa Leary said the network won a 39.4 per cent share of ad dollars in the fast-growing BVOD market on a full-year basis after a big investment in online platform 9Now, which streams reality franchises Married at First Sight and Love Island.

“We’ve spent the last year reorganising the team and how audiences consume content online. We’ve also worked out that there is a palpable difference between ads that you see in professionally generated content versus ads that you see in user-generated content,” she said.

“When you combine that with an environment that is brand safe, fully viewable and fraud free then you can understand why marketers are spending more money in this space.”

Leary said Nine’s focus on the BVOD market underscores why it is chasing a $2.1 billion cash-and-stock takeover of Fairfax as part of a strategy to build a bigger marketplace for tele­vision and digital video ­ad inventory.

“Anything that gives you scale in the digital media market is good. But we need people that are authenticated and logged into 9Now. Fairfax is attractive because they operate newspaper paywalls and collect data on users. It’s a natural fit.”