Madison and Wall: Saturday Summary

Analysis of news and data for the US video industry, ITV, UK and US agencies, and packaged goods companies including Coca-Cola, Mondelez and P&G for the week ending March 2, 2024

This past week featured results from most of the rest of the US television industry who had not yet reported 4Q23 results, including Paramount, EchoStar (owner of Dish Network) and Fubo.  From this data and other data released earlier in the quarter I can now estimate that US national TV advertising – including CTV - was down around -7% in 2023 (those with access can click through for my 4Q23 estimate), which compares with a high single digit growth rate for all advertising.  I’ll have complete “final” numbers for 2023 and a new forecast for each quarter of 2024 and beyond in the coming weeks.   In other signs of weakness and despite the presence of a healthy economy, it appears that total spending on video services (including pay TV, streaming services and theatre attendance) in the US was up only 1% during 2023, consistent with growth we saw within the sector in the 2010s, but now spread among more companies (and with much higher operating costs). 

But at least there’s growth when you invest for share and apply those costs to pursue a global opportunity while others retrench, right?   That doesn’t appear to be the takeaway we see from UK-based ITV, which announced this past week it would sell its its 50% state in Britbox to its partner BBC Studios. Effectively, ITV is joining other single market incumbent broadcasters who are disinvesting, ceding more opportunity to Netflix, Amazon, Apple, Google and anyone else who recognizes that streaming - and the video industry in general — works best as a business when you pursue it with enough scale.    Of course, there’s always the alternative approach of scaling back, laying off employees and blaming the local government for not helping enough.

Speaking of the UK, I also published estimates of quarterly growth rates for agency holding companies there and highlighted key trends in other markets including France, Germany and Canada, too. This followed on a new detailed analysis of agency trends across all types of agencies in the United States - including new sector-wide growth estimates - from earlier in the week.

Of course, one of the key drivers of the growth that we have seen – and will likely continue to see in 2024 – has been the packaged goods industry, which represents around 20-25% of agency and media company advertising revenue.    As I quantified it here, I calculate that this sector grew its organic revenue base by around 8% last year, with advertising up by more.  To better understand key marketing trends for this group of companies, in this note I summarized the most important marketing-related commentary made by CEOs and CFOs from Clorox, Coca-Cola, Colgate, Coty, General Mills, Hershey, Mondelez, P&G and Pepsico at CAGNY, the sector’s most important investor conference, which ran from Feb. 19 through Feb. 23.