Videoage International May 2020
4 (Continued from Page #) World May 2020 (Continued on Page 6) Advertising, the WSJ point- ed out, accounts for up to 46 percent of local TV revenue. Other income comes from re- trans fees. The Times piece focused on the advertising industry and its impact on business and society. According to a report issued by the London, U.K.-based research firm IHS Markit, which was quoted in the article in the Times , each dollar that companies spent on advertising in the U.S. last year led to $9 in sales. In the U.S., the ad industry employs about 500,000 people. In addition, the Times article said, according to the New York City-based ad trade group Interactive Advertising Bureau, overall spending on digital ads for March and April 2020 was down 38 percent from what companies had expected to lay out, and ad spending fell 41 percent on TV, 45 percent on radio, 43 percent in print publications, and 51 percent on billboards and other outdoor platforms. The problemwas compound- ed by the fact that many com- panies tried to protect their brand names by keeping their ads away from media reports about overrun medical facilities, joblessness, and co- ronavirus figures. However, while many na- tional TV advertising cate- gories such as restaurants, travel/tourism, and retail have declined as expected due to COVID-19, other categories, including automotive, insu- rance, and household products have been climbing. In this climate, some advertisers have shifted towards less expensive, non-premium inventory. According to a recent report by the London-based research group Kantar, automotive ad- vertising has seen a 13 per- cent increase in the number of 30-second commercials. Insu- rance has seen a 16 percent in- crease, and household products are seeing a 43 percent spike. Commercials for pharmaceuti- cals (over-the-counter and pre- scription drugs) posted a one percent hike. On the flip side, travel/ tourism is down 94 percent, food advertising is 21 percent lower, retail is off 16 percent, restaurants are down seven percent, and financial services have registered a five percent drop. C onsider this: Up until recently, TV advertising rates kept going up and the number of spots increased despite drastic ratings drops. Today, the contrary is true: Advertising spots and rates are going down despite a surge in viewership. Recently, both The New York Times and The Wall Street Journal published articles about local U.S. TV stations losing advertising revenue due to the COVID-19 pandemic, while still increasing viewership. The Journal reported that local TV stations in the U.S. have more viewers than ever since viewers are leaning on local TV news for updates. For example, the WSJ article said that the Nexstar station group, which owns 196 local stations in 114 U.S. markets, has experienced ratings jumps of 35 percent since mid-March. However, the rise in viewership comes as companies and political campaigns pull back on ad spending. TV Ratings Go Up, TV Ads Go Down
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