Commentary

Are TV Stations Losing Their Advertising Relevance?

by Wayne Friedman , Staff Writer, October 20, 2017

No one wants to hear that local TV advertising is losing its “relevance.”

But Frank Friedman, president of local investment at Publicis Media, who made that remark at a TV industry event, believes this is important information -- now and for the future.

It’s only a $20 billion business at stake -- the annual average size of the traditional local TV advertising pie.

The story has been told many times: The business of buying local TV advertising time is still a painstaking, manual process which can take a frustrated “39 steps” to get done, according to Friedman.

Probably an approximation? We get the drift.

Taking matters into its own hands, Publicis Media is in the middle of making a $50 million local TV programmatic ad deal for a client covering 27 markets. Friedman believes this is the way of the future.

And there is an urgency here. If media agencies don’t move quickly to automation, C-suite media executives -- agency clients -- will. Increasingly, there are self-service ad technologies that marketers can use, leaving media agencies out of the decision-making process.

And that’s not good news -- in either case.

Either using a self-service platform or going through their media agencies, TV advertisers have new media platform choices, which gives them more specific ROI metrics than local TV stations.

If TV stations can’t find a way to offer that specificity, it will be difficult to show core advertising growth. Many new individual local TV programmatic efforts are not taking this lying down and continue to gain business -- slowly. Programmatic local TV sellers with different automation approaches are one hurdle, complicating things for some 1,400 ad-supported U.S. TV stations.

TV stations still have the reach and scale that many digital media platforms don’t. Local TV news content remains a key factor for unique content vs. other media platforms.

However, for digital media platforms, new targeting technologies and local video content deals might change the competitive equation down the road.

Future media platforms not only want to be “relevant,” but easy to buy -- which means taking way less than 39 steps.

advertising, local media, programmatic, tv

2 comments about "Are TV Stations Losing Their Advertising Relevance?".

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Kim S from Media, October 20, 2017 at 4:15 p.m.
on one hand Frank says local TV isn't relevant - on the other he is closing a $50million local TV deal...which is it?
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Ed Papazian from Media Dynamics Inc, October 20, 2017 at 5:38 p.m.

I believe that the referrence point here is national advertisers buying spot TV time locally to refine their national buys with tailored local GRP add-ons, not the value of TV stations to local and regional advertisers. From a national agency point of view buying spot for a national client who is merely tinkering with GRP weights in key markets but relies on national TV as the main platform, the cost and paperwork trail of spot TV is seen a burden, hence the call for automated buying systems. Not surprising, actually. However this does not mean that the TV stations are irrelevant for local/regional advertisers where they function just like the TV networks, albeit in their own markets. As for better targeting, this is mostly wishful thinking as the basic" local" program types--news, syndicated prime access shows and sitcom reruns do not offer the wide diversity in audience composition that will reward a selective targeting system--- if such exists. You either buy news or you dont; you either buy the sitcoms or game shows or you don't. As for station break spots adjacent to network fare, here, the issue is one of CPM pricing relative to ad exposure. For example, primetime station break spots on network affiliates have very low attention levels compared to in-show messages, but charge very high CPMs.