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Sunday, November 22, 2015

The Network TV Security Blanket

Earlier this year, tracking services indicated that television as an advertising medium had declined in real terms for one quarter. This sparked a few headlines and some gloom and doom comments. Yet looking at the last few years, as newspaper, magazines and, to a lesser degree radio have faltered, TV has held is own in terms of dollar share of total advertising expenditures as internet and mobile spending has increased smartly.

For nearly a decade many pundits have been talking about the death of TV as an advertising medium. It definitely has not happened. I have felt that it inevitably will decline but that the fall off will take a very long time. Recently, I surveyed a number of agency people across the country as well as a handful of advertisers and their comments only reinforced my belief.

Each year, several people ask me whether this coming year will be the final bow for the network TV upfront marketplace. I always say no but, when pressed, refuse to forecast when it will become obsolete. People who put precision around such events remind me of the economic Cassandras who pen books entitled with catchy titles such as HOW TO BEAT THE CRASH THAT IS SURELY COMING. Every generation someone gets the timing right but much of that has to be luck.

Is advertiser supported TV in trouble? Yes and no. It is definitely changing and no longer packs the communications wallop that it had not that long ago. Here is a motley mix of comments that I received from agency professionals, a few retired media executives, some active and very anonymous broadcast sales executives, a digital media director, and a local cable trailblazer.

--Retired Network Sales Executive--“Of course, we are in a steady and permanent decline. Hell, even I am a Netflix junkie these days. My former colleagues are a scrappy bunch and they will be standing longer than many realize. They are doing a nice job of bringing new advertisers on air. Some of the tech guys should know better as they do not need us all that much.”

--Agency Media Strategist--“You once asked me how things were going in my shop as we evolved in to digital. I was annoyed with you but there is a “knife fight” (your term) going on each year among the network buyers and the planning team. We keep pulling network TV back in our initial plans and adding more digital. Clearly, we are winning but the haves, the old line negotiators, are not rolling over. We spend too much in all forms of TV but directionally things are getting better.”

--Agency Media Chief--“My big problem is a few of our biggest clients. Network TV is a security blanket to them. Off the record, we still do too much. I am trying to have my team wean them away from it. Several years have gone by and we are making progress. To me, network TV is not going to dry up and blow away. It is getting downscale and a lot older. That argument seems to work with our more traditional clients.”

--Sales Manager, Local Market (Network Affiliate)--“it comes down to two things, Don. We are taking clients that we never would have considered 10 years ago and are proud to get them. Also, we are licking our chops about the upcoming political season. This would never have happened years ago. And, as you and I have discussed the last decade, TV does not work nearly as well anymore. Our local news is awful but is still a station cash cow. Go figure.”

--Digital Media Director--“I try to move people along into more digital options. We are always recommending tests. I have avoided wars with the broadcast players at my agency and traditional clients. The smart old ones see what is happening and are riding it out until retirement. A lot of money is being wasted but it used to be worse.”

--Local cable sales star--“We are doing more and more with zoned buys and strong promotions. The little retailers love it and we have made TV affordable for them. It is a lot more work but we will prolong the life of our version of TV longer than most are betting.”

--Local TV sales chief--“Whenever I have a bad day, I tell myself, it could be worse. You  could be selling newspaper or radio (laughs). We have lost the under 30 crowd except for a few sporting events. Game over? No way. But, we cannot turn this ship around no matter what New York says.”

So, US TV is still a big force in advertising. Its influence is sagging and smart young people are going to work elsewhere according to my sources. Video usage will continue to grow but advertising avoidance should move in lockstep with it.

If you would like to contact Don Cole directly, you may reach him at doncolemedia @gmail.com

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