Brian Wieser, a Madison Avenue and Wall Street analyst who has long been one of the staunchest defenders of television's advertising primacy, is no longer so sure. In this morning's edition of his "Madison and Wall" newsletter, the former GroupM business intelligence chief, acknowledged, "Now I see more downside risk than upside potential" for television as an advertising medium.
After making a case for how previous
threats to TV's ad dominance -- the rise of DVRs a quarter century ago, the rise of big reach digital platforms like Facebook a decade ago, etc. -- Wieser cites the rapid erosion of pay TV penetration
as "the big issue" shifting him from television bull to bear.
"Penetration continues to fall at a dramatic pace, and is poised to decline below 50% in the United States probably towards the end next year (down from more like 90% at the beginning of the last decade)," Wieser writes, explaining, "This is leading to a severe erosion of the potential for traditional television to satisfy reach-based media goals within any reasonable range of cost (i.e. a marketer can buy the first or second decile of reach in a campaign relatively inexpensively, but each percentage point of reach becomes dramatically more expensive, rising at a much faster rate than CPM inflation)."
While Wieser says he doesn't expect an imminent demise of TV as an ad medium, he concludes that the definition of TV as a distinct video ad medium may soon be endangered.
"I don’t expect 2023 to be a bad year for television advertising, and it’s even likely that the national TV upfront marketplace in the United States will be relatively normal," he projects, explaining, "The bigger factors driving growth now and in the years immediately ahead probably include whether or not newer advertisers who depend on what TV does well emerge, or if existing large ones who do not presently rely on TV much choose to spend significantly more than they did previously."
In the end, Wieser points to one of his favorite villains -- or depending on your perspective, heroes -- as TV advertising's ultimate threat: the kind of "creative destruction" that churns TV advertising's legacy brand advertisers; and the degree to which newer advertisers will sustain the medium's growth in a "connected TV" world.
"The bigger question to me relates to whether or not the bulk of advertisers who rely on TV today will take a broader view of the medium to include newer forms of video – user-generated content in particular – alongside traditional, professionally produced forms," he concludes, adding, "The alternative – a sustained definition of “television” as it was historically – is much more likely to experience ongoing decline."
The scariest thing for TV, outside of the fact that household penetration will fall below 50% in a couple of years even with vMVPDs is the fact that over 65% of time spent with Broadcast/Cable is among A55+. There will be limited supply unless TV Publishers switch to selling based on A2+ or A18+.