Game Over For Spot TV?

Last week, I was visiting a relative in a market that is no longer a top 50 Nielsen DMA. For a change, I watched a bit of local network affiliate TV checking some local news and a few other programs. I was more than a bit surprised by what I saw.

The issue was not at all the quality of the actual programming. It was the size and quality of the advertisers. I expected local multi-unit retailers and some car dealers. Instead, the airwaves were flooded with individual craftsmen such as plumbers, roofers, and glorified handymen hawking their business. 

All may be solid business people and pillars of their communities. The gnawing question was how can they afford to advertise on DMA wide TV? The answer clearly was that the network affiliates were taking what they can get. Actually, I applaud the sales teams who do not look down their noses at tiny players. What hit me was that the relentless decline in spot tv revenue was clearly coming to an end soon.

Also, how could the commercials pay out? A rule of thumb for decades is that you needed a certain number of points of distribution if you were advertising across an entire DMA for advertising to work for a retail advertiser. These one shot players must have been paying almost nothing for the time or would only be on one brief flight and swear off over the air TV as it failed to move the sales needle profitably for them. Local cable, however, could certainly work in some cases for single unit advertisers.

Linear, or over the air TV, was the greatest mass medium ever. Both network and their affiliate stations were able to reach an overwhelming majority of the country or their individual market respectively almost weekly. Profit margins for strong affiliates were a virtual cash machine. Not so any longer!

In media, as in life, it has always been true that the only constant is change. Still, I felt a bit of sadness getting hit so directly with visible evidence of the medium’s decline.

It also brought back another issue that I have mentioned several times over the years in Media Realism (MR). How does one launch a new product aimed at a mass audience? Fragmentation continues to get worse. My answer is that a few upstarts will break through as their message and products go viral. Most success will likely come from the existing giants in many categories who can do line extensions and are a proven quantity to most prospects.

You may reach Don Cole at doncolemedia@gmail.com or leave a message on the blog.