You will be redirected back to your article in seconds

TV Ad Growth Overshadowed by Surge of Digital Giants Like Facebook, Google

Ad revenue in the U.S. TV industry is enjoying a brief rebound thanks to higher pricing in the upfront and scatter marketplaces. But while the Big Four TV conglomerates celebrate single-digit ad-revenue growth, they may want to look outside their sector for a reality check.

Over the past few months, Facebook has managed to surpass the domestic ad revenue of Comcast, CBS Corp., Disney, and 21st Century Fox. The $13.1 billion that the social-media company and Google brought in together in the second quarter dwarfs the Big Four’s combined take. (Facebook’s domestic data includes Canada, while
Google considers the U.S. alone.)

Google has always had many times the ad revenue of Facebook, but Facebook is closing the gap at a rapid rate. In fact, it’s the growth rates here that are the most striking. At a 64% trajectory, Facebook grew eight times more than CBS Corp., the fastest-growing entertainment company.

At that rate, it won’t be long before Facebook gets to Google’s current scale in the U.S., far surpassing the major TV companies combined. And Facebook’s global ad revenue is twice its domestic take-up.

sources: Company Reporting, jackdaw research Analysis

One of the big reasons for Facebook’s spike is advertisers’ response to the personalized nature of its advertising. Whereas Facebook can individually target its monthly and daily active user base
(226 million in the U.S. and 175 million in Canada at the end of June) based on a granular understanding of their personal characteristics, the major TV companies know far less about their audiences, relying on broad demographics. 

The Big Four’s online offerings do a little better in this department. But with an audience fragmented across pay TV, branded sites, apps, and third-party online services like Hulu and Sling TV, it’s impossible for buyers to get a real sense of who TV viewers are, or what their interests might be.

Facebook now generates an average of $50 of revenue per year from its users in the U.S. and Canada, up from $34 a year ago and $21 the year before that. But there’s no comparable metric for the TV companies.

Another big advantage Facebook enjoys is that some of its ad units generate revenue only if they lead to specific consumer actions. Known in the industry as “attribution,” it’s a feature TV still can’t offer.

So while the TV industry toasts itself on a slightly better quarter, Facebook and Google will continue to walk away with a growing slice of the overall ad revenue pie. Put in that context, it’s harder to celebrate the TV industry’s modest achievements.

Jan Dawson is the founder and chief analyst at Jackdaw Research, an advisory firm for the consumer technology market.

More Voices

  • Contract Placeholder Business WGA ATA Agent

    WGA, Agents Face Tough Issues on New Franchise Pact (Column)

    The Writers Guild of America and the major talent agencies are seven weeks away from a deadline that could force film and TV writers to choose between their agents and their union. This is a battle that has been brewing for a year but few in the industry saw coming until a few weeks ago. [...]

  • FX Confronts Streaming Thanks to Disney

    Kicking and Screaming, FX Is Forced to Confront Future in the Stream (Column)

    During his network’s presentation at the winter Television Critics Assn. press tour, FX chief John Landgraf made waves — and headlines — by mounting perhaps his most direct criticism yet of Netflix. Landgraf, whose briefings to the press tend to rely heavily on data about the volume of shows with which FX’s competitors flood the [...]

  • Longtime TV Editor Recalls Working for

    How a Bad Director Can Spoil the Show (Guest Column)

    I have been blessed with editing some of TV’s greatest shows, working with some of the industry’s greatest minds. “The Wonder Years,” “Arrested Development,” “The Office,” “Scrubs,” “Pushing Daisies” and, most recently, “A Series of Unfortunate Events.” I have earned an Emmy, ACE Eddie Awards, and many nominations. But whatever kudos I’ve received, over my [...]

  • Stock market Stock buyback

    Stock Buybacks Leave Firms Without Funds to Invest in Future (Column)

    Corporate giants on the S&P 500 have spent more than $720 billion during the past year on stock buybacks. Media and entertainment firms account for only a fraction of that spending, but even $1 million spent on share repurchases seems a foolhardy expenditure at this transformational moment for the industry. The record level of spending [...]

  • Hollywood Has Come Far With Diversity

    An Insider's Look at Hollywood's Diversity Efforts and How Far It Still Needs to Go

    I am a white man working in Hollywood. I grew up in Beverlywood, an all-white, predominantly Jewish, Los Angeles neighborhood sandwiched between 20th Century Fox Studios and MGM, where my elementary school had only one black student. I am compelled to write about diversity in Hollywood because “diversity” — in front of and behind the camera [...]

  • Venice Film Festival A Star is

    How Venice, Toronto and Telluride Festivals Stole Cannes' Luster (Column)

    In all the years I’ve been attending film festivals, I have never seen a lineup that looked as good on paper as Venice’s did this fall, boasting new films by Alfonso Cuarón (“Roma”), Damien Chazelle (“First Man”), Paul Greengrass (“22 July”), Mike Leigh (“Peterloo”) and the Coen brothers (“The Ballad of Buster Scruggs”) in competition, [...]

More From Our Brands

Access exclusive content