“We anticipate political advertising will generate significant ad revenue for local television this year, in particular for over-the-air revenue,” said Mark Fratrik, SVP and chief economist at BIA Advisory Services. “Of all media, television still dominates in political years, even as campaigns integrate more digital advertising into their overall strategy.”
To offset generally flat OTA revenue, television is expanding its multiplatform advertising offers to deliver content effectively in today’s multi-touch point content ecosystem. In particular, television is increasing its share of location-mobile advertising. The firm estimates that location-targeted mobile ad spend will be $22.1B in 2018, which includes $3.1B of additional mobile advertising sold by traditional media players, including television broadcasters and other traditional media.
“Mobile advertising is a smart play for television because it offers a unique opportunity to leverage existing assets such as news and weather through sponsored mobile websites and applications,” commented Fratrik. “These types of efforts are important as over-the-top – or OTT – services continue to attract viewers.”
As indicated in the forecast, retransmission fees have become significant to local stations. Gross retransmission consent revenue increased to more than $8 billion in 2017 and is expected to grow to $8.440 billion in 2018. BIA predicts that on a market-by-market basis, retransmission fees will continue to rise over the next five years, based on specific household growth rates, as well as expectations on price increases and consumer behavior.
Speaking to the forecast, Fratrik added, “This year will be particularly interesting to watch in terms of political and digital. Local television is at a juncture where strategic decisions will be key to their success. To ensure we are delivering reliable data and insights, our forecast this year includes the largest number of revenue reporting stations we’ve ever had. Plus, we’ve added a new data scientist to our team to process the forecast against enhanced criteria and methodology.”
