• by Joe Mandese  @mp_joemandese, February 12, 2016

In a sign that the national TV advertising marketplace may have more legs than its cynics believe, a top Wall Street analyst issued a report this morning “defying the notion” of a “permanent secular decline” for TV’s share of national ad spending. In fact, the analyst --  Pivotal Research Group’s Brian Wieser -- estimates that the national TV ad marketplace rose as much as 7% in the fourth quarter and as much as 2% for calendar 2015, despite being compared to an Olympic and election year in 2014.

After adjusting for the so-called "quadrennial" effect, Wieser estimates the "normalized" growth for that national TV industry in 2015 could be as much as 3% -- which, while modest, is far from the "doom and gloom" projected by most investors and analysts over the past couple of years who predicted the expansion of media options and the erosion of TV ratings would also erode the TV advertising marketplace.

“These results reinforce our view that changes in viewing and ratings have only a limited effect on ad spending,” Wieser writes in the report, entitled “A Funny Thing Happened On The Way To The TV Advertising Funeral.”

“Demand is mostly independent of supply,” he continues, adding “although networks with relatively more supply are better-positioned to capture demand. We believe this is because for advertisers, ad budget decisions focus on least-bad alternatives. For those seeking broad reach, sight-sound-and-motion and brand awareness, traditional TV still utterly dominates all alternatives despite the growth of digital media owners and increasing consumption of video on internet-connected devices. This advantage will hold for many years. Digital media owners such as Facebook can offer reach and frequency, but in lieu of spending on content which brands will want to align their products with, mere reach and frequency won’t do. Of course, brands may alter their strategies and goals and shift TV money to Facebook, but that is another matter and one which takes longer time frames to play out.”

Despite the relatively strong end of 2015, Wieser predicts that 2016 will not be an “easy” year for the national TV ad marketplace.

“We do think that national TV should have a good upfront, with low single digit volume growth and high single digit pricing,” he says. “But investors shouldn’t expect that national TV can do much better than the total market for advertising will do, which should see +2 to +3% growth once again (ex-political and incremental Olympic advertising). There are shifts of spending from TV to digital on the margins.”-