Ad spend in the metropolitan, regional and state TV markets has dipped in the first six months of 2016 according to figures from Free TV, pointing to a challenging market for free-to-air broadcasters.
The figures complied by KPMG for the television industry body show that metropolitan gross advertising revenue from January to June 2016 has fallen by 3.89%, compared to the same period in 2015, to $1.35 billion.
All metropolitan markets, except Brisbane which grew 0.31%, have also dropped, with Melbourne falling 7.19%, Sydney by 4.44% and Adelaide by 3.79%. Perth fell by 0.54%.
The figures also give insight into network performance in 2016, with Seven picking up 39.2% of the revenue this year, a slight dip from the first six months of 2015, where it had 39.5%.
Nine recorded 35.6% of revenue, a fall from 38.6% in same period in 2015, while Ten jumped from 21.9% to 25.2%.
Network Ten director of revenue and client partnerships Rod Prosser says the numbers highlight its “continuing momentum and the fact we are growing ahead of the market and ahead of our rivals”.
Seven West Media chief revenue officer Kurt Burnette says that the network has been top for a "record 20 consecutive halves. No one has ever achieved that".
"Seven is again the number one in ratings and leading in every key demographic - and now growing our audience," Burnette says. "That will translate to continued domination, with all our new and returning content launching out of the Rio Olympic Games stronger that it has ever been."
Regional TV markets fell by 5.69% to 390 million, with Western Australia experiencing the biggest fall of 9.12%, followed by South Australia with a drop 7.09%.
State revenue also dropped by 4.3% to 1.74bn with the biggest decrease coming from Victoria with 6.78%. New South Wales fell by 4.9% and South Australia by 4.29%.
Why the drop?
Atomic212 chairman Barry O'Brien says the results in Sydney and Melbourne will have a "massive impact on the overall TV market".
"In terms of TV markets I know that each network is working very hard on grabbing market share and every sales dollar is critical," he adds.
Speaking to AdNews, a spokesperson from Free TV says the figures point to the pressing need for media reform for the broadcast industry.
“These revenue figures highlight the challenging environment facing free-to-air broadcasters and in particular the urgent need for further licence fee reform, to bring Australia into line with international best practice,” the spokesperson says.
“These changes are critical to enable commercial free-to-air broadcasters to remain competitive and continue providing Australians with the best entertainment, news, drama and sport for free.”
Carat chief investment officer Ashley Earnshaw says while it has been a volatile market what hasn't changed is the ability of television to deliver for clients.
“We observe that there has been a change in revenue year on year reflecting both the audience volatility in the market, the softer trading conditions and in some quarters advertisers looking to new solutions to gain reach in their advertising campaigns,” Earnshaw says.
“Television engages and this has been a constant with the Olympics about to truly demonstrate the power of event television in Australia across Seven West Media’s platforms.
"We would say that from a Carat point of view we need to be less focused and obsessed by legacy media metrics. Carat has a cross platform screen approach to video buying and therefore we are becoming less focused on audience shares and linear buying metrics."
Burnette agreed that the numbers only reflect part of the total television market given its digital footprint.
"As the Kool-Aid now starts to be sipped rather than gulped, the industry can get on with focusing on the facts," Burnette says. "TV is and will continue to be the most effective medium in all its new and evolving forms, with the power of content and creativity inside that making all the difference."
Think TV CEO Kim Portrate pointed to the success of the medium for clients.
"Television is all about effectiveness - of building brands and growing businesses," she says. "Certainly we are seeing a shift back to TV by advertisers - as witnessed in the US and UK."
Maxus Melbourne CEO Mark McCraith says the numbers coming out of the Sydney and Melbourne metro markets were surprising, noting that they may have been hampered by the election. A lot of election spending went into grassroots and digital campaigns instead of television, and big brands campaigns don't tend to be released during the election.
“It's interesting that expenditure into Sydney and Melbourne is down yet the demand for TV at the moment is the highest it's ever been in terms of accessing into quality shows,” McCraith says.
“Advertisers are cherry picking the best TV programs in the market and there could be some other areas on off peak schedules that aren't firing as well because of the ratings.”
What's next?
McCraith expects launches in the second half of the year, including the Olympics to have a positive impact on figures.
"Nine had a bad start to the year and I would expect that to bounce back in the second half of the year and courageously Ten is running their new shows during the Olympics," McCraith says. "I would expect Ten to stay the same and Seven to bounce because of its Olympics coverage.”
Nine Entertainment chief sales officer Michael Stephenson says: "Our performance for the full fiscal year 2015/16 is a 37% share and given it has been well reported we had a slow start to calendar year 2016 we are very happy with that result.
"We have been in market this week and will do so again next, with our content for the remainder of 2016 and into the first half of 2017 and feedback has been really positive to our strong slate of local content coming through so we feel confident in what we will deliver to our audience and clients for the next fiscal year."
O'Brien says the numbers are a great result for Seven but that the network might be able to take a 40% share in the second half of the schedule. He says Nine has a big challenge ahead but is looking at a strong second half with the NRL and The Block, while Ten's results show off the hard work its team has put in.
"A decent schedule with cricket, MasterChef, The Bachelor and market support from clients and agencies have Ten in a stronger position," O'Brien says. "I also believe the strategy of MCN managing the sales for Ten is starting to pay real dividends."
Earnshaw also noted that the figures point to a share lift of Ten across all capital cities, reflecting not only “their audience stability and performance, but also the work that they have been doing in the market in changing the metrics of television or more broadly screen based buying”.
Prosser says that Ten is the only primary free-to-air television channel that has increased its prime time audience this year.
“The revenue and revenue share growth we are seeing reflects the success of our consistent schedule and premium content, and the success of our partnership with Multi Channel Network,” he adds.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.