The broadcast networks have a big problem, says the
Hollywood Reporter's Diane Mermigas. The television upfront season, an advertising institution, is just six months away, but she says there
is no way the networks can launch a new season with the kind of pricing and strategies used in the past. She says that this year, just to maintain last year's pricing and volume levels, the networks
may have to throw in new media or a few extra product placements, as now more than ever the economics of the $18 billion network TV upfront is being scrutinized. Why? Because advertisers are getting
used to the culture of relevancy and accountability that surrounds new media, which she argues is no longer unknown territory. New media's spending will hit a record $12 billion this year and is
expected to grow its share of the ad market for years to come. This year, the Internet is expected to contribute 30 percent of advertising growth, Mermigas says, reducing the growth rate of
traditional advertising to 3.9 percent in 2005 and 2.9 percent in 2006.
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