Commentary

TV Station Groups Promise Advertisers More Than They Deliver

TV station buying will not slow down, despite the demise of Sinclair Broadcast Group-Tribune Media mega deal. But will the TV station future really be that different?

Expect Sinclair to make an attempt to buy other stations in whatever way it can, given current federal regulations. Also look for the Nexstar Media Group, another big TV station owner, to try and buy Tribune, per the New York Post.

If that isn’t enough, private-equity companies -- such as Apollo Global Management, Providence Equity Partners and Blackstone Group LP -- may be interested in buying local TV stations, according to CNBC.

It sounds like great news for potential buyers and sellers. But where is this headed in the long-term?

Consolidation may sound like a positive business plan. However, it comes with some necessary cost-cutting.  

Does that mean fewer anchors, reporters at TV station newscasts, more station-wide national content, and thus less compelling local news coverage? Will new syndication program deals also slow down, making it harder for new shows on TV stations?

Sounds like increasingly stale on-air content to come.

TV station executives will say the new ATSC 3.0 broadcast standard means a whole new world for TV stations -- complete with new interactive, digital, and programming opportunities to come.

Remember, this is the same industry that primarily works in a slow-moving, analog world when it comes to local TV advertising. How many years have we heard about the TV station industry giving major media agencies what they long demanded: more automation for media buying?  

Sure, TV stations have made some digital media inroads. But that comes from TV stations' efforts around their own digital platforms, not from their linear TV business.

When it comes to providing a more efficient media buying-selling operation for national TV marketers' ad spend on local TV, it's weak at best.

In the end, TV stations can only count on what predominately exists right now: Buying more TV stations, grabbing onto growing retransmission revenues and sharp every-other-year spikes in political ad revenues.

True TV station business innovation will be left to the next guy -- or worse.

Here’s a warning earlier this year from Frank Friedman, former Publicis Media local TV media buying executive:

“If we don’t push [spot automation] forward, we see a conflict coming our way, which is extinction,” he says. “If we don’t make these changes, we’ll continue to live on reduced [spot] budgets year after year, and we will not succeed.”

4 comments about "TV Station Groups Promise Advertisers More Than They Deliver".
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  1. Ed Papazian from Media Dynamics Inc, August 23, 2018 at 3:33 p.m.

    Wayne, I'm having a bit of trouble relating the headline of this piece to its content. TV stations generally promise advertisers a certain amount of audience for a certain amount of money---sometimes in particular shows; other times in rotating packages of shows. I'm not aware that any advertisers are promised a given number of anchors or reporters per local newscast, let alone a "compelling" experience for the viewer. As far as providing  more "efficient"---aka "automated"---systems to make buying local TV time easier for the agencies, that sounds fine in theory but it has to be weighed against the cost of the automated systems and the value received. I am not aware of major discussions with advertisers---as opposed to agency time buyers and media directors--- on this point, let alone broken promises by the stations. I happen to think that operations such as Videa have promise as they mimic the actual real world buying and selling process and assist  the human players rather than replacing them. But this will be a joint initiative between stations and agencies that will develop over time. The stations aren't promising advertisers anything--as yet.

  2. Joan FitzGerald from PremiumMedia360, August 23, 2018 at 3:41 p.m.

    Broadcasters are, today, investing in automation to reduce friction with their agency partners  through the TIP (Television Interface Practices) initiative.  Hearst, Nexstar, Raycom, Sinclair TEGNA and Tribune are all members.  (Warning! Shameless plug to follow): My company Premium Media 360 is the first to adopt the TIP API standards and today advertising data automation is a reality between broadcasters and agencies who use our intelligent data mapping, correction and reformatting platform.  So all is not lost!  Automation is really happening in the broadcast space!

  3. Dan Modisett from Maxair Media, August 24, 2018 at 5:32 p.m.

    The Headline is a poor choice of words.  Some truth in the article on progress on automated system for broadcasters, but the same could be said for all the digital platforms.  How much did advertisers overpay for faulty data from digital companies?  TV stations deliver most recognized value for and advertiser.

  4. Colin Williams from Comcast Spotlight, August 28, 2018 at 2:26 p.m.

    Joan, I am curious of this TIP API protocol to which you are referring. What is the base dataset used and what, if any, automatoin of this data onboarding could be used and processed to be used through a braodcast signal? Pardon any ignorance here. Curious minds want to know! 

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