Magazine

The "Mystical Hold" of TV


The thing is this: We still like to watch. Or, at least, advertisers do. Broadcast TV keeps losing audience, but the hold on its share of the ad pie still bests other big-media competitors. Despite the rightful hype about fragmentation and TiVo (TIVO), this medium has proved more tenacious than you might think from the ratings. In the 1984-85 season, 38 million households tuned in to broadcast networks during prime time, according to Nielsen Media Research Inc. (VNUVY). In 2003-04, only 31 million did.

The dollars, though, tell a different story. In 2004, broadcast TV's share of U.S. ad dollars was around 18%, which represents a 19% loss from its share in 1984, according to Universal McCann (IPG) data. Print media's ad share fell badly, if not worse, during the same period -- magazines' and newspapers' share of U.S. ad dollars dropped by 18% and 33%, respectively -- even though total magazine and newspaper circulation has held steadier than TV's prime-time viewership. "Declining audiences with increasing [ad] rates," muses Jack Kliger, CEO of Hachette Filipacchi Media U.S. Inc. "I envy that." Plus, last time I checked, there wasn't an exploding market for devices to let you skip print ads. Keep this in mind as the press chatters on about the death of the 30-second commercial, prompted this time by news that Procter & Gamble Co. (PG) will shift some TV ad dollars into things like product placement. And results of this year's network upfronts were flat.

THE LONG-TERM INDICATORS ARE WEAK, so what is it about TV? Let's start by talking about upfronts, the annual dog-and-pony shows at which networks trot out their upcoming prime-time lineups. A network upfront is loud and unsubtle, it's not especially good for you, and it attempts to dazzle with celebrity past the point of reason. As such, it's a lot like television. Ad deals are struck then -- in theory (the deals are nonbinding) -- for around 80% of the next season's ads.

This year, the upfronts hiccuped. Because of a weak showing by NBC, the advertisers committed to $9.3 billion of ads, about the same as last year (despite the first ratings uptick in years). But in the two previous years, upfront commitments posted substantial gains despite audience falloff. In other words, the upfronts have consistently gone better than doubters expected. So much so that Kevin Roberts, CEO of Saatchi & Saatchi Worldwide (PUB), recently griped that networks "seem to be gouging advertisers. Their rates are going up, and the return-on-investment is coming down."

One key dynamic is scarcity. If you are hot to get on the season finale of Desperate Housewives, well, there are only so many spots to go around. This is not an issue for print . (You may recall, dimly, when The Industry Standard published phone-book-size issues.) And there is a market perversity that favors networks, says David Poltrack, CBS (VIA) executive vice-president for planning and research: Today's top shows have lower ratings than top shows of the past, but they still stand tallest in the market. Says Merrill Lynch & Co. (MER) analyst Jessica Reif Cohen: "To reach a mass audience, I don't see any alternative" to broadcast TV.

Ad execs concede that TV is still the power and glamour center at agencies. "A lot of decision-makers in the ad and marketing businesses have grown up with TV," says one. Another honcho recalls that historically, TV ads were agencies' most profitable line, though this is changing. And, as Kliger points out, it's more alluring to produce, or star in, a TV ad than, say, a radio voice-over or a static outdoor ad. It wasn't print that made Frank Perdue famous.

Celebrity is what it's all about. No matter the numbers, advertisers have a hard time forsaking TV, for reasons that go beyond effectiveness studies and concerns about the model. One ad executive speaks of "the long-term mystical hold" that TV has on client and ad agency minds. P&G may move away from the TV spot, but it's not moving away from networks. This, after all, is America. You may not star on American Idol, but you can still make sure your product does.

By Jon Fine


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus