You see the Trivago guy ‘all the time’: Corus on quest to bring more advertising dollars back to TV

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If you want proof that TV advertising isn’t dying, just look at the Trivago guy.

That’s a message Corus Entertainment Inc. chief executive officer Doug Murphy is taking to the market: Digital companies such as Trivago, Expedia, Amazon and Google are all seeing the value in TV ads. Such technologically savvy companies are heavily focused on customer data, and they invest in marketing channels that they can see are having an impact on people’s purchasing decisions.

All those commercials with the silver-haired, slightly smug and occasionally twinkle-toed spokesguy are a cause for optimism, as far as Mr. Murphy is concerned.

“I mean that guy on Trivago, the reason why you see him all the time is because television advertising works. You can see it in their results,” he told analysts on a conference call to discuss the company’s second-quarter results on Friday. “… There’s a plethora of these digital advertisers now on television.”

Corus saw an 11-per-cent lift in TV advertising revenue in the three months ended Feb. 28. The company expected a boost compared with the same period the prior year, when advertisers were drawn away to channels carrying the Olympics; but the growth was higher than expected and the best result in years, Mr. Murphy said. The company also forecast that it expects low-single-digit percentage revenue growth in TV next quarter.

Mr. Murphy pointed to a recent study conducted by Accenture commissioned by industry group ThinkTV, which analyzed more than $700-million in annual media spending in Canada, as well as sales data from 105 brands over more than four years. The study argued that advertisers across four key segments – automotive, consumer packaged goods, over-the-counter drugs and telecommunications – are overspending on digital. It called for a correction in spending – more on TV, less on digital – which it predicted would drive higher sales.

Corus teams have met with roughly 300 advertisers so far, and intend to meet with 400 more, to promote the study and make the case for adjusting their media-spending mix.

“We’ve always opined that the market had shifted too far into digital,” Mr. Murphy said.

The Toronto-based company, which owns radio stations, the Global television network and a slate of specialty TV channels such as W Network and HGTV, reported on Friday that its revenue grew to $384.1-million in the quarter, up from $369.5-million in the same period last year.

Television revenue grew to $353.5-million, compared with $336.2-million the previous year. Radio revenue fell to $30.6-million from $33.2-million. Radio revenues were soft across the industry and not just at Corus, Mr. Murphy told analysts on the call, adding that the economic climate in regions such as Alberta had an impact.

Corus’s net income attributable to shareholders fell to $6.3-million, or three cents a share, from $40-million, or 19 cents a share, last year. The company attributed most of the drop to an accounting change on the estimated value of its television brands that began in September. The “useful life” of those brands now ranges from three to 20 years, as opposed to indefinite. That changed the way the company calculates amortization and resulted in $34.9-million in added amortization expenses in the quarter.

Corus also highlighted its progress in debt reduction. Its leverage ratio now stands at 3.05 times net debt to segment profit, and the company said it intends to reach its goal of reducing net debt to less than three times segment profit by the end of the fiscal year.