Online Video Is A Two, Maybe Three Percent 'Solution,' At Best

Since TV network sales execs say they are only generating about two percent of their revenues from online video, I figured I’d ask the media buyers on this morning’s Outfront panel what the right amount of advertising budget is to be allocated to “digital.”

I reminded them that cable TV didn’t get off the ground until ad agency Ted Bates (now part of Saatchi) came up with the “5% solution,” the concept that big broadcast TV advertisers should start allocating 5% of their TV ad budgets into cable. And I asked them what they thought the right solution is. Interestingly, it’s about what the network sales chiefs say they are currently doing a couple of points.

“It could be as little as 1%,” Initiative’s Chris Magel said, adding, “It could go up to 2% or 3%. But it doesn’t make sense to go much above that.”


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