Who said television was dead?
The broadcast television advertising market posted its largest monthly increase in October in nearly two years.
Advertising spending rose 12% last month on the country's major broadcast networks, compared to the same period a year earlier, according to preliminary figures from the Standard Media Index, a New York-based industry research group. The increase marks the largest uptick in spending since January 2014 when spending rose 13%,
"There are a couple of things playing out," James Fennessy, SMI's chief commercial officer, said in a phone interview. "You're seeing a much better upfront market, and we're also seeing a lot of the new programming that has really gained a lot of traction with new audiences and advertisers."
The upfront market refers to advertising sales that take place prior to the start of the fall season.
The apparent resurgence in advertising follows third quarter reports from broadcast and cable-TV network owners that saw mostly declines in advertising spending and slow growth in the fees that pay-TV providers pay to carry their channels. Shares of 21st Century Fox (FOXA) , Time Warner (TWX) , CBS (CBS - Get Report) and Viacom (VIAB - Get Report) , owner of MTV and Nickelodeon, have suffered over the past year as advertising sales have largely declined.
"Broadcasters had a very tough first half of the year, so it's very reassuring for them to see an uptick at the end of the year," said Art Muldoon, CEO, Accordant Media, a programmatic buying agency.
Broadcast TV, a $70 billion business that remains the largest single biggest media platform in the world, wasn't the only segment that posted a rebound for the month. Spending was up 15% overall, with digital ad spending increasing 34% and cable-TV networks gaining 9%.
Leading the top year-over-year spending increases across the board were non-alcoholic beverages, up 51%, prescription pharmaceuticals, up 50% and entertainment, up 24%.
Three categories helped lead broadcast television spending with pharmaceuticals jumping 46%, automotive rising 21% and the so-called quick-service restaurants increasing up 21%. Spending in the upfront market was up 10% while the scatter market, which takes place as the fall season begins, rose 19%, SMI reported.
Live sports, especially NFL, and original programs such as Fox's Empire were big draw for marketers.
Network owners appear more confident that October's growth can be sustained through the holiday season," Fennessy said.
A battle for market share by telecommunications companies led by Verizon (VZ - Get Report) and T-Mobile (TMUS - Get Report) and consumer electronics brands and retailers may also benefit television broadcasters.
"There are major players in both spaces for market share and that's leading to huge dollars flooding into the marketplace," Fennessy said. "Buying is up across the board, and digital and TV are being planned and measured in concert with one another. Marketers are looking to tie their broadcast dollars to digital in order to get more bang out of their buck."