MATRIX LOCAL TV SALES REPORT

2Q 2013 Spot Recap: Total, -7.2%; Core, +2.2%

That core increase was driven by auto spending, which was up 7% compared to the second quarter of 2012. Other high-growth categories in the quarter: telecommunications (+34.1%), non-alcoholic beverages (+26.5%) and home products (+14.3%).

Core spot TV revenue in the second quarter was up 2.2% over last year, driven largely by healthy gains in auto spending, non-alcoholic beverages, home products and telecommunications, according to Matrix Solutions.

Core revenue excludes political advertising, which drops off precipitously in odd-numbered years because of relatively scant political campaigning. Total revenue, which includes political, declined 7.2% in the quarter.

Compared to the second quarter of 2011, core in the second core of this year was up 8.6% and total was up 7.9%.

“The spot business still looks like it is going in the right direction,” says Matrix President D.J. Cavanaugh. As the rush to buy TV stations underscores, he says, “people still believe in spot television.”

Matrix is a Pittsburgh-based supplier of customer relations and sales management software. Its quarterly local TV sales report, exclusive to TVNewsCheck, is based on sales data from more than 400 client TV stations. It includes revenue from station-specific websites and digital subchannels.

“Auto seems to be bouncing back very strong, which should continue through the rest of the year and give some stability going into next year,” Cavanaugh says, noting that it accounted for 26% of the revenue in the quarter.

BRAND CONNECTIONS

Cavanaugh is not alarmed by the drop off in Tier 1 (factory) auto spending (see chart below). “My gut tells me it is one of two things: My customers might be mis-categorizing what’s Tier 1 and Tier 2 (auto dealer associations), which is possible, or Tier 1 money might be going from factory to associations before it is being spent.”

The positive numbers in furniture and home products, up 6.1% and up 14.3%, respectively, are a reflection of post-recession rebound of the housing market, Cavanaugh says. “The growth is really coming from local stores, which I thought was even more encouraging.”

Another good story for broadcasters is telecommunications, which accounts for 5.3% of total spot receipts. The category was up 34.1% quarter-over-quarter, thanks in large measure to liberal spending by AT&T, says Cavanaugh. “It was up in most markets.”

Comcast and Time Warner were also heavy spenders, he says. “The only one that was down was Verizon.”

A sour note in the data is restaurants (comprising both casual and quick service), which ranks second in spot spending, accounting for 6.8% of the total. The category was down 3.5% in the quarter compared to 2012, down 9.2% compared to 2011.

Broadcast TV Sales, 2nd-Quarter Comparisons

 Category Group  2013 vs. 2012  2013 vs. 2011
 Alcoholic Beverages  -27.6%  -27.7%
 Auto Total  7.2%  38.7%
      Auto — Tier 1  -10.4%  16.5%
      Auto — Tier 2  12.4%  78.1%
      Auto — Tier 3  13.0%  23.8%
 Department Stores  -2.7%  -28.5%
 Education  -10.1%  -3.5%
 Financial, Insurance, Real Estate  -2.3%  8.5%
 Food  0.1%  -5.1%
 Furniture  6.1%  10.9%
 Govt. & Organizations  -8.0%  24.8%
 Health Care  -4.5%  -1.1%
 Home Stores & Products 14.3%  15.6%
 Legal Services  2.1%  3.8%
 Leisure & Entertainment  4.1%  4.0%
 Media  0.6%  -1.7%
 Non-Alcoholic Beverages  26.5%  -23.6%
 Political  -88.8%  -28.7%
 Products  -32.6%  -37.8%
 Restaurants — All  -3.5%  -9.2%
      Restaurants — Quick Serve  -2.7%  -9.7%
      Restaurants — Dining  -6.2%  -7.6%
 Retail  -5.7%  -9.4%
 Services  -3.0%  6.4%
 Supermarkets/Grocery  1.3%  9.8%
 Telecommunications  34.1%  11.5%
 Travel  -6.4%  9.7%
 GRAND TOTAL  -7.2%  7.9%
 EXCLUDING POLITICAL  2.2%  8.6%
 SOURCE: Matrix Solutions    

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