CBS thriving, AMC struggling amid soft TV ad marketplace, analyst says

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UBS said the lack of improvement lately in the TV ad marketplace appears to be driven more by cyclical factors than secular shifts.

With the TV ad marketplace appearing to soften, CBS is best poised during upfronts while AMC Networks could be in for a struggle, according to UBS.

In a research note, for which UBS interviewed 39 advertising executives, UBS said the lack of improvement lately in the TV ad marketplace appears to be driven more by cyclical factors than secular shifts. The firm is predicting the TV upfront market will be up low-to-mid single digits in CPM price increases and flat-to-down slightly in volume

“Advertisers indicated that the sports category will see the greatest increases and broadcast prime and news would see declines. Also, advertisers seemed interested in the Paramount [Network], Viacom's new entertainment channel focused on A25-54 year old audiences. From our survey, upfront positioning was noted as favorable for (in order) CBS, NBC, Turner and Scripps, and less favorable for (also in order) AMCX, FOXA, A&E and ESPN. From our panelist, Fox and NBCU were highlighted for integrating broadcast and cable, and that Viacom's targeting efforts were helping it keep ad spend it would otherwise be losing,” UBS wrote.

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UBS’s survey also showed that overall digital is continuing to take away spending share from TV. According to the firm, 64% of advertisers said budgets shifted from TV to digital over the past 24 months, but that number is expected to lessen to 57% going forward. In protecting ad dollars from moving toward digital, targeting is a big factor, with OpenAP (the new Viacom, Fox, Turner targeting platform) “attracting meaningful interest.”

As upfront season progresses, Standard Media Index has shared some figures examining the current upfront from October 2016 to March of this year. Upfront spending continues to dominate ad spend with 76% share, compared to 18% for scatter spending and 6% for direct response. Compared to the same period from one year ago, upfront spending is up 3.7% to $16.5 billion while scatter is down 11.5% to $3.8 billion.