[opendtv] Re: News: Why TV Advertisers Are Spending More for Less This Season

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 28 Jun 2010 15:15:50 -0500

Craig Birkmaier posted:

http://adage.com/article?article_id=144674

Honest to pete, another example of naysaying for "inexplicable" reasons.

First, the article explains how viewers fast-forward through ads, and seems to 
be making a case against TV ads.

At the end, it instead explains how several broadcast TV cases are already, or 
are expected to be, very successful with ads.

If there are examples of TV shows, from all different genres, that are 
successful with ads and project growth, the obvious conclusion ought to be that 
advertizers continue to weigh their options and find that broadcast TV has 
potential. Even against competing media. Do these guys have an axe to grind, or 
what's the deal?

Advertizers need to keep improving their product, just like everyone else who 
wants to stay in business. There have been some recent ads that I've 
deliberately slowed down to watch, even more than once, like the PC vs Mac ads, 
and at least two of the Windows 7 ads. The French girl at the cafe who has had 
a bit too much caffeine, and the Brit girl in the London cab, are both 
excellent examples of clever ads, worth watching a couple of times.

Bert

-------------------------------------
Why TV Advertisers Are Spending More for Less This Season

Ad Age Survey Finds Buyers Anticipate Modest Commercial Ratings From Networks' 
Fall Lineup 
By Brian Steinberg

Published: June 28, 2010


NEW YORK (AdAge.com) --

After forking over price increases of 7% to 10% for ad time on broadcast TV in 
the recent upfront market, advertisers are likely to blanch at a disquieting 
fact: They are paying more for less. 

Ad buyers are projecting noticeable declines in household commercial ratings 
across the prime-time grid for the coming fall season, according to Advertising 
Age's annual survey of ratings estimates from media-buying firms. The estimates 
reflect modest expectations for the broadcast networks' new programs and tough 
comparisons with year-earlier predictions. 

Ad Age's survey is compiled by averaging fourth-quarter and first-quarter 
estimates for household commercial ratings from four major media-buying 
agencies. C3, the shorthand term for commercial ratings, measures the number of 
viewers who actually watch commercials during a selected program rather than 
changing channels or fast-forwarding past them with a digital video recorder. 
Viewers who watch ads live as they run or as many as three days after they air 
are included in the ratings. Since the start of the 2007-2008 TV season, 
advertisers have crafted transactions based on C3 ratings, which take into 
account the number of viewers who watch commercials during a program, rather 
than the traditional ratings for the program itself. 

The projections suggest significant audience erosion. For the recently 
completed 2009-2010 season, for example, ad buyers had projected a 14.1 
household C3 rating for ABC's popular "Dancing With the Stars," a 13.1 for 
CBS's widely watched "NCIS" and a 13.7 for the Tuesday airing of Fox's 
"American Idol." But for the coming cycle, they envision those programs will 
generate household C3 ratings of 10.3, 10.8 and 10.37, respectively. At 
present, a single ratings point equals about 1.15 million households. 

What's the problem? Media buyers suggest the declines in viewership for 
commercials by the demographic most coveted by advertisers -- consumers between 
the ages of 18 and 49 -- fell in a range of 5% and 11% in the recently 
completed season, depending on which of the four networks was being measured. 
Simply put, they aren't certain the TV networks can reverse the trend. 

Few returning shows have a track record suggesting growth is in the offing, 
said one media-buying executive. Some veteran programs have simply matured, and 
some shows ready for their sophomore outing didn't show much promise in their 
freshman year, this buyer said. Those programs that do have some growth 
potential appeal to an extremely loyal following, this executive said, making 
it tough to envision people who haven't already caught on will try to get 
onboard. Broad-based general-entertainment networks are suffering from a 
similar fate, this executive said. 

Increasing costs
Penetration of DVRs into consumers' homes has also begun to slow, according to 
estimates from Interpublic Group's Magna Global. The TV networks often suggest 
that increased use of DVRs helps bolster commercial ratings, because consumers 
spend more time recording top broadcast programs for later use (even so, the 
majority of them fast-forward past the ads). 

ABC, CBS, NBC and Fox either declined to comment or were unable to make 
executives available for comment. All the broadcast networks sold more ad 
inventory at higher prices in this year's upfront marketplace than they did 
last year, which suggests advertisers are seeing the cost of reaching 1,000 
people -- a negotiating measure also known as a CPM -- increase as the ability 
to draw that number of people at any given moment to the TV screen is 
diminished by competing digital media. 

The C3 comparisons may be tougher than they ought to be. Ad buyers say last 
season's projections were likely bumped up a notch or two, owing to the fact 
that they were based on higher-than-normal ratings from the 2008-2009 season. 
That season included boob-tube coverage of the presidential election and 
inauguration. 

The fall schedule still has a bright spot or two. NBC will be able to eke out 
some gains in 10 p.m. over its ill-fated "Jay Leno Show," according to ad-buyer 
projections. "Chase" on Monday nights and "Law & Order: Los Angeles" on 
Wednesday nights will generate better commercial viewership than "Leno" was 
able to in the prior season, according to comparisons with last season's 
estimates. Likewise, Fox's "Glee" will show an increase in household commercial 
ratings when it airs Wednesdays in the season's second half, according to the 
projections. 

The freshman show likely to generate the greatest viewership of commercials 
that support it is CBS's revival of "Hawaii Five-O." The show's projected 7.25 
household C3 rating is greater than that of any other new program set to launch 
in the 2009-2010 season. 

Meanwhile, live sports and broad-skewing talent contests continue to generate 
the greatest commercial viewership. NBC's "Sunday Night Football," Fox's "Idol" 
and ABC's "DWTS," along with the popular CBS drama "NCIS," are all expected to 
generate a double-digit household commercial rating, a feat few regular shows 
can match.  
 
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