Following a tough year for European broadcasters, in which ad revenues fell for many of the major players in a tough ad market, the early signs for 2024 are more promising. Following ProSieben’s announcement earlier this week that it’s seen a recovery in TV advertising revenues (though it didn’t detail the extent of this recovery), MFE announced it has seen six percent year-on-year ad revenue growth in the first quarter of 2024. In Italy, its largest market, ad revenues were up by five percent while in Spain, growth hit eight percent.
This last stat is particularly noteworthy. MFE’s Italian broadcaster Mediaset was something of an outlier last year – the Italian market saw a substantial recovery in the second half of last year, with growth as high as 8.0 percent year-on-year in October. So while gross ad revenues had fallen by 0.6 percent in the first half of the year, Mediaset reported full year ad revenue growth of 2.1 percent.
Spain however was a different story. Mediaset EspaƱa’s ad revenues in the first half of 2023 were down 3.3 percent, and while the second half was slightly better, full year revenues were down 2.2 percent. Nonetheless there had been some promising signs in the market. Spend for many major sectors was grew compared with pre-pandemic 2019, including retail, home care, household equipment, and media.
Now, with eight percent growth in the first quarter of the year, Spain’s TV market looks in a healthier place too. Mediaset EspaƱa’s 2023 performance was fairly in line with the wider Spanish TV market, which was down 2.4 percent according to Matteo Cardani, managing director at MFE’s sales house Publitalia. Thus, it’s likely MFE’s reported growth for Q1 is reflective of the wider market too. MFE said the early signs from April are that growth is continuing in both markets.
A winning formula for MFE?
Publitalia’s Cardani said the strong start to 2024 is a marked change from recent years. “Over the past four years, we got used to a pattern where all advertising investment was very focussed on Q4,”he said. “So the performance of each year was built on an outstanding Q4 performance which was immediately counterbalanced by a weak Q1 performance.”
Cardani said some of this comes down to changes on the buy-side – which could have wider ramifications for other Euro broadcasters. MFE has seen a significant recovery in spend from the auto sector which has boosted revenues, and despite ongoing conflicts in the Middle East and Ukraine, has felt the benefits of calmer macroeconomic conditions.
However MFE also points to its own strategy as driving its success. In Italy in particular, MFE is confident about the overall health of its business, despite the fact that unlike many other broadcasters, its revenues come almost entirely from advertising.
While viewers in Italy are moving away from TV, they’re moving into streaming in greater numbers, meaning Mediaset’s overall audience is growing (though the company didn’t give figures for total audience hours spent on Mediaset properties). And Cardani said Mediaset is getting higher CPMs for digital viewing, meaning there are potential gains to be had from audiences shifting to streaming (though higher CPMs may be negated by lower ad loads).
Cardani put MFE’s success down to two factors: focussing on its content and establishing a cross media offering.
“We are a broadcaster, and if you’re focussed on the quality of your content and your core business, there is no tradeoff between linear and digital,” he said. “A good content proposition wins on linear and extends digital on-demand consumption. That’s the simple recipe that’s working.”
Meanwhile, MFE’s ability to offer a mix of media types to its clients is helping it to capture budgets. “We’re offering seven different media from linear to digital,” said Cardani. “And the majority of our revenues are based on clients buying more than three out of seven media from our offering. This cross-media offering is working very well and strengthening our relationships with our clients.”
