Commentary
CBS Makes Bold TV Ad Predictions
- by Wayne Friedman , Staff Writer, December 8, 2015
"Change is now underway," said David Poltrack, chief research executive at CBS Corp, speaking at the UBS Global Media event on Monday.
Poltrack -- somewhat shockingly -- estimates 2016 will be a strong growth year for broadcast television ad sales, with near-double-digit percentage gains (9.5%). Among other things, he believes marketers will drift away from digital media platforms, and back to TV because of key metrics: TV is all about reach -- not price efficiency. And that reach will prevail over digital trends.
Anyway, you look at it, that’s a bold statement -- especially since on that same day, media agency group giant GroupM said all TV ad spend would only rise 2.3% next year (more in line with the U.S. economy as a whole), with most of that going to cable TV networks.
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Poltrack pointed to strong current scatter advertising market activity that will result in big gains this coming upfront. One could add in big momentum from Summer Olympics advertising and a big political advertising year.
Of course Poltrack, like his boss Les Moonves, is a big cheerleader for broadcast television.But could there be more going on? Perhaps nagging issues of viewability, ad blockers and ad fraud might be taking their toll on digital platforms (which,may have also “dinged” CBS’s ad-supported digital areas).
All thistmight mean good things for the traditional TV platform, which still bring in the big bucks.
Separate from this -- reading between the lines -- one wonders if CBS and others, are counting on gaining advertising revenue by extending traditional TV ratings metrics, with C3 expanding to C7 and other ad-related income beyond.
Back to Poltrack, who asked the audience at UBS to prepare for a shocker -- a big number, 9.5% of ad growth, which he believe could even go higher -- into the unimaginable double-digit range. Those kind of hikes haven’t been seen in over ten years -- 2004, says Poltrack!
Might this really happen? One thing is for sure: CBS produces big drama.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
There is little doubt in my mind that Dave's comments reflect---to a fair degree---what he and CBS sales execs are hearing from advertisers. I hear some of the same, myself. While there is still concern about TV rating fragmentation and interest in digital alternatives, there is an increasing realization that digital---with its many negative issues now recognized, coupled with its inability to make industry-wide corrections---has lost much of the momentum it had a year or so ago as "the solution". There is still time to turn this situation around, but if digital ad sellers don't move quickly and decisively to do what's needed----sell 100% viewable impressions and reorganize the way ads are presented----that opportunity will be lost. In which case, traditional TV, with all of its audience "monetized" will be "the answer".
Broadcast TV or Linear TV is not the answer to the consumer or user for media experience and consumption. If Advertisers follow eyeballs and the declining Pay TV model, then Moovenes assumptions are based on belief in their own Legacy Model.
May I remind what Viacom Diller said about how advertising is sold for TV- "It's a Con Game".
Historically more $$$ for significantly less reach- just look at the most popular shows 15 years ago and today.
It may very well be the uptake on the CBS app is no where near what they have in legacy bundled model so they have to pound the table on PayTV- what else is Les supposed to do- wave a White Flag?
Leonard, in my annual, "TV Dimensions 2016" I point out that the average minute ratings of broadcast network TV shows are, indeed, down significantly relative to the good old days---currently they are only a third of the old levels. However advertisers don't evaluate the medium based only on its average minute rating levels. Instead, they spread out their buys on many shows and networks, thereby attaining the reach they desire.
I should add that even so, it is increasingly difficult to maximize reach using traditional TV "platforms" such as broadcast network. As I point out in "TV Dimensions 2016", the old tables used by media planners probably overstate the reach attainable by their time buyers and show revised estimates that document this point. For example, thirty years ago, a major broadcast network primetime buy ( 500 GRPs per month ) probably got you a 85-90% monthly reach. Today, the same buy with the same GRPs requires triple the number of spots to deliver 500 GRPs and will probably not reach more than 70% of your target group monthly. As you can see, the decline in reach is much less than in average minute or average telecast ratings....and most advertisers are aware of this. They are also aware that digital video can not match TV's reach capabilities---even if the latter are diminished somewhat by audience fragmentation plus those who abstain from broadcast fare for sustained periods--- sometimes for a month, sometimes even longer.