If one were in the doom-and-gloom business, you know, hypothetically, one would be hard-pressed to explain the surge in the TV upfront market, in which the broadcast networks apparently now fetch CPMs of up to $24.40 for 18+-year-old viewers in prime time.
ABC, CBS, and NBC are commanding the highest price gains -- around 9% to 12%, according to media-buying and selling executives, in early deal-making, reports MediaPost’s very own Wayne Friedman.
Surely this must be good news. The slow-simmering economy since the Great Recession has finally come to a near boil, and demand is beginning to bubble to the surface. And TV, the most powerful medium in the history of humanity, is demonstrating with Twainian satisfaction that reports of its demise were premature.
Latest ratings show that there are now, like, 11 people watching network TV in real-time, 1 of whom is Les Moonves and 8 of whom are shut-ins. Economy or no economy, considering TV’s increasing irrelevance, why the irrational exuberance? Is this really good news?
No, it is not good news. It is horrible news. Horrible, horrible, horrible.
The rise of TV CPMs over the past 20 years, from the standpoint of marketing and economics, can be attributed to only one factor: fragmentation. Although first cable and then the Internet vastly shrank network viewership, what the nets were left with was -– and remains -- much, much bigger than the other fragments. As we Chicken Littles have been crying for more than a decade, price increases are exactly like what you face at airport sandwich kiosks or the last gas station before Death Valley.
It's called “gouging.”
The thing is, online marketers have the capacity with automated simplicity to aggregate vastly larger audiences than even, say, The Big Bang Theory’s 18 million. And because the supply/demand curve has so devastated online pricing, that audience of 18 million can be had vanishingly cheap. At this point in the Digital Revolution, technology and the price differential should have long since made it impossible for the gougers to gouge and consigned the bloated aristocrats of TV to the guillotine.
But nope, they’re dining on cake. Why?
Because the revolutionaries can’t govern. They can’t defeat bots and other fraud. They can’t force users to look at their ads, because users have no wish to, ever. They lard their pages with trackers and cookies and other code that slows page loading to a crawl. They have simply failed to deliver on the promise of the Internet.
If you will permit a metaphor shift from A Tale of Two Cities to Goodfellas, they have jailed the mafia, but the mafioso are still living high on the hog and running their rackets from jail.
If TV prospers in a mobile world, we should pay homage to its power and resilience. But we should also take a cold hard look at the New World Order. The future of the content we actually consume hinges on the ability to somehow underwrite it. If leading national advertisers are placing their bets not on the future but on the past, the revolutionaries have truly botched the job.