MATRIX SPOT REPORT

After 3 Quarters: Total, +16.1%, Core, +4.5%

Those percentages, from Matrix Solutions, are a marked improvement over the firm's first-half figures and the 4.5% core growth is tied directly to continued strength of auto advertising. Matrix President D.J. Cavanaugh: "Obviously, political is driving this business right now — some might argue that it's driving it crazy — but even when you take political out, 4.5% growth is pretty healthy, particularly in this economy. I think it bodes well for the business."

The first three quarters on 2012 have been good to broadcasters, even if you discount the massive political spending that is nearly overwhelming lucky stations in the presidential swing states, according to the quarterly report from Matrix Solutions.

For the nine months ending Sept. 30, total revenue was up 16.1% year-over-year, while core (total with political advertising factored out) grew 4.5%.

Those percentages are a marked improvement over Matrix’s first-half figures: +10.4% total, +3.9% core.

They are also better than TVNewsCheck’s consensus forecast for all of 2012: +14.3% total, 4% core. The consensus forecast comprises the thinking of 16 broadcasters, reps and analysts surveyed by TVNewsCheck.

“If you look at the trends, they keep going up, so you have to say broadcasting is having a pretty good year,” says D.J. Cavanaugh, president of Matrix Solutions, a Pittsburgh-based supplier of customer-relations and sales management software.

Matrix’s gain-loss percentages in 22 major ad categories and seven subcategories are based on sales data from more than 400 client TV stations. They include revenue from station-specific websites and digital subchannels.

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“Obviously, political is driving this business right now — some might argue that it’s driving it crazy — but even when you take political out, 4.5% growth is pretty healthy, particularly in this economy,” Cavanaugh says. “I think it bodes well for the business.”

The 4.5% core growth is tied directly to continued strength of auto advertising at all levels — Tier 1 (manufacturers), up 9.5% over three quarters; Tier 2 (dealers associations), up 26.6%; and Tier 3 (local dealers), up 21.2%.

Cavanaugh acknowledges that the Tier 1 spending is relatively soft, but speculated that may be due to the manufacturers “pushing some of the money down to the dealer association. But even at that, at 3.3% in the third quarter, it’s still showing positive growth, which is always good.”

According to Cavanaugh, auto spending accounts for between 25% and 28% of station revenue.

Of the 22 categories, 12 were gainers over the three quarters. In addition to auto and political (up 487.4%), the nine-month gainers include alcoholic beverages, education, finance, furniture, government, heathcare, home stores, services, groceries and travel.

Ten categories are down for the three quarters, but three of them — leisure and entertainment, retail and telecommunications — showed growth in the third quarter.

Of the losing categories, Cavanaugh says that the one broadcasters should be especially concerned about is Restaurants, particularly the quick service (QSR) or fast-food subcategory.

“The year-to-year comparisons just tend to go down each quarter,” he says. “That’s one I would tell you to keep an eye on and see what’s going on.”


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