Home-improvement TV Still Going Strong on Cable Despite Soft Market

From Big-box Retailers to Paint and Hardware Suppliers, the Dollars Are Still There for the Right Audiences

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Is the home-improvement TV programming in need of a remodel?

The economy has raised questions about the viability of such programming. After all, with the home market roiled by foreclosures and more consumers unable to find the cash to purchase new homes, one might think interest in watching the ins and outs of home buying and improvement on TV might wane.

Guest designer John Gidding and "HGTV\

It's a fair guess, but not necessarily true. While on broadcast, the popular ABC program "Extreme Makeover: Home Edition" has seen the traditional ad dollars contributed to its support decline in recent years (though it continues to weave ad messages into its content), ad support for programs on cable's HGTV continues on an upward trend. It raises the notion that the genre may have enjoyed its moment in the mass-audience sun but still holds appeal for aficionados and smaller audiences.

The genre is still a healthy one, media buyers suggest, albeit one that is steadily maturing. "Eventually there might be some diminished appeal for the home-improvement category as the market continues to get more saturated with 'like' shows, but it will stay healthy for a while longer," said Billie Gold, VP-director for programming services at Aegis Group's Carat.

Consider that in real life many homeowners who are able to (or have to) stay in their current residences may feel the need to pay to upgrade and update them, either for comfort or future sale. At Moody's Analytics, the short-term forecast (over the next few months) calls for little activity. But over the intermediate term -- between now and 2015 -- that is anticipated to change.

"We do expect residential construction to start picking up by the end of this year, and to recover at a fairly rapid rate until it peaks in mid-2014, with housing starts peaking at only slightly below the rate of 2005 at the top of the housing bubble," said Moody's Associate Director Andrews Carbacho-Burogs. "Total residential-construction spending will also recover, though not back to 2005 amounts, thanks to the recession reducing not just house prices but also construction costs."

Home-improvement programs tend to garner attention from "endemic" advertisers, including big home-improvement retailers such as Home Depot and Lowe 's, but also range to suppliers of paint, gardening supplies, hardware and more, said Shari Cohen, executive director-investment at WPP's Mindshare. In some cases, the advertising alliances go beyond the expected. In a deal Mindshare helped construct, Sears would allow its various tools and appliances to be used in a home renovation depicted on "Extreme," then would highlight the items on its website. Measuring website activity after the program helped the retailer determine how the "Extreme" ad deal was working.

But "Extreme" looks less popular than it did in the past. In 2008, the show took in around $225.3 million in traditional advertising, according to Kantar Media; in 2010, it secured just under $153 million. In another sign of its weakening performance, ABC is moving the show this fall to the 8 p.m. slot on Fridays, as opposed to the prime 8 p.m. slot it has occupied on Sundays for many years. A spokeswoman for ABC's ad-sales division said executives were unavailable for comment.

Cable, though, appears to be experiencing a different trend. NBC Universal's Bravo has mined a "designing" theme, with programs such as "9 By Design," "Flipping Out" and "Million Dollar Decorators."

At Scripps Networks Interactive's HGTV and DIY cable networks, executives have not seen a slackening of demand for the genre, said Jon Steinlauf, the company's senior VP- ad sales. "Some advertising tied to new housing starts fell off in 2009, but a lot of others ended up staying with us," Mr. Steinlauf said. "We haven't seen a decline in advertising in either 2010 or 2011," he said, with interest seen from marketers of paint and flooring, among other home supplies.

In a sign that advertisers remain interested in this niche, two HGTV programs have seen ad revenue climb. "House Hunters" -- more focused on the quest to purchase a home than improve it -- has seen ad revenue increase to about $83.2 million in 2010 from about $57.6 million in 2008, according to Kantar. And "Holmes on Homes," about a fierce home-repair expert who rights the wrongs committed by various home contractors, has seen ad revenue increase from about $2.8 million in 2008 to about $43.2 million in 2010, Kantar said.

No matter how successful the program or how well it lines up against particular interests, advertisers are likely to spread their money around. "Our TV advertising looks for that alignment between the home-improvement customer and the programming which they engage," said Lowe's spokeswoman Abby Buford. "There is some common programming which is a natural fit with HGTV, for example, but we also recognize media fragmentation, and to influence a mass audience we reach customers at multiple touch points."

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