Commentary

Confidence Low With Consumers, Not TV Executives

DirecTV CEO Mike White recently mused about his wife bragging about deals she landed at Costco. White reportedly had compensation of $33 million last year, so if his wife feels pinched, it indeed is a new normal.

Yet, what's remarkable is the apparent health of Big Business contrasted with the struggles, real or perceived, among so many Americans. Somehow, through making spending cuts or raising prices or some other machinations, large companies seem to be growing even as consumer confidence does not augur a morning in America.

There may be some cutbacks - General Mills last week said fiscal year media spending was below the previous one - but there is a certain golden age of marketing emerging. Social media, Web 2.0 (or is it 8.0 now?), an IPG magic window and all sorts of new avenues -- where pricing models are still being set -- offer first-inning opportunities.

In that vein, General Mills noted that it continues to "increase the efficiency of our media spending."

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That may apply to in-store displays. But if it is doing that with TV, that's a Harvard B-school study. Recent prices increases in the upfront, despite declining ratings, would make that impressive.

As an ad vehicle, TV may get knocked around a bit when there's a recession, but that's pretty much alays been a cyclical hit and a not secular one. It's a Teflon medium.

So, when a Harris Poll comes out suggesting trouble ahead for the likes of packaged goods companies, restaurant owners and beverage marketers, are networks making changes to long-term revenue projections anticipating spending drops? Probably not.

The poll conducted online from June 13 to 20 of 2,163 adults indicates an expectation the economy will get worse. Purchasing of generic brands is up (Procter & Gamble has been dealing with that) and people are increasingly bringing their lunches (not great for McDonald's and Coke, for example).

Results show 67% of Americans are buying more generic products for savings, up from 61% in February. Data is less dramatic with brown-bagging lunches, which is now at 46% versus 45% earlier this year and last fall.

But, even if these trends accelerate and Mike White's wife continues to scour Costco, TV advertising has found a vital role that's maybe more so than ever. As Initiative's Kris Magel characterized it, TV is throwing a blazing fastball right into the "catcher's mitt," meaning the Web, whether on a Mac, tablet or smartphone.

TV is the brand builder that drives people online for research, entertainment or purchasing.

Networks can also take comfort in the load of Americans who have low consumer confidence until they enter a store.

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