As 2016 comes to a close, local TV affiliates are ending an unpredictable year with a projected revenue of $31 billion. While local TV spending was occasionally less than expected, a look at the entire year affirms local affiliates’ places in advertisers’ pocket books. But what else does this year tell us about spending, and what can we expect next year?
The 2016 election proved to be a doozy, with the Chicago Tribune showing that some local affiliates—including its own—pulled in up to a third less revenue than projected. Donald Trump’s unique campaign strategy relied less on a traditional media and more on earned media, skewing advertising numbers.
By the end of the campaign, however, the candidates’ dollars demonstrated local TV’s undeniable importance in reaching audiences. MediaPost reported nearly 72 percent of Hillary Clinton’s television spend went to local ads, while Trump spent 85 percent of his ad budget on local television.
Growth in New Opportunities
Local TV grew this year, with many affiliates incorporating gains from digital advertising into their overall revenues. In an interview with Media Life Magazine, Mark Fratrik, SVP at BIA/Kelsey, said the industry is healthy and credited this health to positive advertising growth and online ad sales. He estimated local stations generated over $1 billion in online advertising, with the expectation that the industry will see double-digit increases over the coming years.
Local TV in 2017
In addition to growth in online advertising and a consistent place in advertisers’ rosters, local affiliates will see changes as ATSC 3.0 progresses and programmatic TV matures. The ATSC 3.0 broadcast standard is being designed to address changes in viewer behavior, accommodating the variety of media sources and delivery platforms in use today. As broadcasters invest in this standard, the industry looks toward new opportunities for revenue and innovative business models. And while ATSC 3.0 is one piece of growing addressability, more growth is coming from broadcasters’ investments and partnerships with Smart TV providers.
Videa’s own president, Shereta Williams, wrote an article for ExchangeWire about changes the television industry can anticipate from programmatic TV in 2017. In addition to ATSC 3.0’s impact on addressability, the industry will see changes in reporting and growth in the OTT market. “Traditional measurement companies,” she wrote, “such as Nielsen and comScore, will include more spending, behavioral and psychographic data, in addition to demographic and viewing data…there will also be new metric techniques available to measure and value audiences.” The OTT market will naturally see continued growth as audiences continue to view television and video in nontraditional ways.
Local TV in 2016 showed signs of growth and health, along with the ability to evolve as the industry changes. This bodes well for the coming year.