Broadcast TV station online ad sales up 14% last year


Last year was a good one for local broadcast TV stations’ online ad sales—with the growth hitting a $1.4 billion, according to a TVB report released 2/3.  Online revenues were some 6% of total gross revenues in 2010, up from 3.5% three years ago. Banner ads scored 66% of the pie; Streaming Video 18%; Email Advertising 11% and Paid Search 5%.

Average station revenues inched up to $750,000, but the majority of stations made a half-million or less from their online initiatives. The best-performing stations were making between $5 million and $11 million, said the report, compiled by Borrell Associates.

The importance of online revenues to broadcasters continues to grow not only in theory, but in financial terms. Online revenues amounted to 6% of total gross revenues in 2010, up from 3.5% three years ago.

TV websites also grew in-market advertising share. Broadcasters accounted for 10.4% of the $13.5 billion spent on local online advertising last year, up from 9.3% in 2009. The average station’s share depended on market size, with the smallest stations averaging 2.2% and large-market stations averaging 0.5%.

Stations with higher revenues or market shares tended to grow a bit faster than the average or under-performing sites. But the growth gap wasn’t significant. “That may mean that the canyon is widening between stations who have invested heavily in new revenue streams and those who continue to view online media as a little more than a marketing extension for their stations,” said the report.

As mobile apps inject new excitement into the web-advertising environment and as video advertising increasingly goes interactive, TVB/Borrell is expecting another banner year for TV online ops in 2011 with 17% growth. A break-out year may be imminent, and they are forecasting a 33% growth rate in interactive advertising for local broadcasters in 2012, followed by a 25% growth rate in 2013.

The top local ad-spending categories continue to be general merchandise stores, car dealers and real estate agents—reflecting the efforts of merchandisers to meet up with consumers who are researching major purchases online. 

The report made the following recommendations for broadcasters:
•         Online video has a bright future, but there’s as much risk in TV stations losing broadcast video advertising as there is gaining it online.  A key strategy for TV managers is to look for more opportunities to deliver video advertising in more creative ways than just pre-roll.
•         Email advertising has an equally bright future, though tends to go untapped by TV stations.
•         Sales training/retraining) is becoming a requirement to survive both the old media and new media environment.
•         Incremental growth is achievable with barely an effort, which means exponential growth might be achievable.

The research tracked interactive advertising for 4,332 local websites in the U.S. and Canada through voluntary submission of data. This is the sixth year Borrell has conducted the benchmarking report for TVB. This year’s report focuses on data submitted by 630 TV stations.

RBR-TVBR observation: Indeed, the key to continued growth will be the continued rollout of 4G (and later 5G) networks, which can take the TV station,  its content and advertisers messages out of the home in a solid, stable, seamless  manner. Less buffering, etc. TV also has another thing going for it—the rollout of mobile DTV, which will also increase overall viewership/ratings. TV stations and their websites continue to keep pace and outpace other local media because they’ve made the proper investments and resources into the third screen.