Ad Money Returns to TV — From Where?

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Les MoonvesTelevision, especially at the network level, is getting more advertising dollar these days and several leaders of television ownership groups predict a strong buying upfront.


Where is the money coming from? That was a big question posted to CBS Corporation Chairman and CEO Leslie Moonves Thursday at a Needham investor conference.

The money is flowing back into television advertising from several places, says Moonves. One is from digital, which was “the great, shiny object…People realized the ROI is not really there.”

Commenting on news reports of fraudulent measurement in some cases, he said when “machines are counting” the audience “that’s not good measurement and not value for your advertising.”

Television is also performing better than basic cable ad-wise and he predicts a strong upfront.

Last year was “relatively slow. CPM growth was 4 or 5% but our volume came down…selling something like 74%.” That’s when the market hesitated and put more into digital, Moonves said. Then because scatter was so good agencies paid 25 to 30% more for ads then they would have done in October.

“I think year they realized that,” he said.

The total dollar amount for upfront ad time is estimated at some $80 billion including all three traditional television networks plus Fox. That also represents some 80% of the inventory.

Asked about the jockeying for position by political advertisers versus other clients, Moonves said “political is mostly local though what happens at the network will trickle down. Our local stations will do better because they will have less inventory to sell.”

“Political replaces the ads and tightens the marketplace. We like the political ads and hope they spend a lot of money,” says Moonves.

International content licensing deals are also bringing money back into television. The so-called back-end subscription video on demand revenue has tripled in the last decade to $1.5 billion and is still growing. In Germany for example, there used to be 3 or 4 players and now there’s 10-12, made up of local players plus major ones like Amazon and Netflix. New markets are opening up in Latin America, Eastern Europe and China, according to Moonves.