Commentary

Downward Signals For TV, To Be Ignored At Your Peril

I recently delivered a keynote in Amsterdam at SpotOnTV2014 (yes, that is how it was spelled, presumably so that it could be easily turned into a hashtag). SPOT is the Dutch association of TV sales houses.

Obviously, many speakers represented TV networks or TV sales organizations, and therefore many were quite positive about the general state of TV as a platform and as a business.

And they have every reason to be happy in The Netherlands. The networks have maintained their relative share of consumer time spent with media, and TV budgets are looking a little healthier again after a deep recession.

Here in the U.S., times are also pretty good if you’re in the TV biz. Brian Wieser from Pivotal Research tells us that TV budgets are forecast to grow by about 3.5% over the next few years. Much has been made of the fact that soon the total amount of money spent on digital advertising will surpass TV. But Wieser tells us that this is OK, because as some advertisers shift dollars from TV to other media, new advertisers that were not on TV before are bringing in fresh dollars.

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The danger, is of course, that the industry will lull itself into a false sense of security or inertia (times are good, so why worry?). That would be wrong because there are many signals that point the other way.

According to CMO.com, 24% of CMOs said that they are decreasing their TV expenditure in 2014. About half of all CMOs said that budgets will stay the same in 2014, and 22% say they will increase. This reflects a net decrease in a marketplace that is not in recession and where advertising budgets are growing.

And it seems that marketers don’t seem to care much about TV either. In discussions with the World Federation of Advertisers, companies confirmed that they spend between 5% and 30% of their time making decisions about TV schedules and budgets, while  this represents between 40% to 80% of their ad budgets. They spend 50% or more of their time with anything digital, which typically only represents between 10% to 35% of their budgets. That is a clear disconnect.

Then there is a study by Adobe, which questioned marketers and their agencies at the beginning of the year, asking them which one area was their most exciting opportunity for 2014. TV was not on the list at all. 

The U.S. TV market just came out of its weakest upfront season on record. Perhaps this is because TV has managed its magic trick again of raising prices while delivering flat or declining audiences. And as Social Media Insider Catharine Taylor outlined in her most recent post, there is a whole generation growing up who are just not that into you, traditional TV. And at some point TV can’t charge more and more and deliver less and less.

Don’t get me wrong, TV’s creative strengths are not in question, and I believe there is and always will be a role for it as part of the media mix, in whatever form it may evolve. But that role can only be safeguarded if TV can deliver large and engaged audiences at a relatively affordable cost. That ability is being challenged.

And what is also undeniably true is that traditional TV’s seat at the marketing table has been marginalized by anything digital. That's a signal the supply side of TV had better take seriously.

1 comment about "Downward Signals For TV, To Be Ignored At Your Peril".
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  1. Sheldon Senzon from JMS Media, Inc., September 29, 2014 at 12:51 p.m.

    Talk about a not so hidden agenda......."He now runs his own integrated marketing consultancy in partnership with Flock Associates:.
    Nothing new discussed here, we all know there's a shift in the planning and buying process away from traditional/linear TV to a bunch of other opportunities including digital. TV (Broadcast/Cable) still remains the only viable means to reach half of any demo in a 24 hour period with the type of messaging smart advertisers (how do you spell CPG/Automotive/Telcom/Retail?)need to move product.

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