• by Paul Gough , July 1, 2003

There's growing evidence that the double-digit CPM increases swallowed by advertisers in the recent upfront won't go down as easily next time around. Already, executives from big-name advertisers like General Motors and Wendy's have served notice that there's plenty of other options beyond television and they're exploring them all.

And the president of the Association of National Advertisers, which represents 300 companies spending $100 billion annually on marketing and advertising, said that perhaps enough is enough.

"I think this was a wakeup call," said Robert D. Liodice, the ANA's president and chief executive officer.

He said that advertisers were surprised by the price increases and that, while it's beneficial for television networks now, the changes in the marketplace and the drive toward more precise metrics could tip the balance of power away from the television networks.

"I think marketers are going to be far more careful before they let it happen that way again," Liodice said. While he wouldn't rule out an increase next year or future years, he said that he doubted that companies could or would swallow sky-high CPM rises for long. He said that this year, there was a level of fear about not getting enough on TV if advertisers didn't spend big and a sort of irrational exuberance that might have affected the marketplace as well. But the reality remains that costs are going up and ratings are declining, and advertisers are looking for a marketing mix that builds brands and sell products.

"I think people are going to say, 'enough is enough,'" Liodice said.

In recent years, ANA and its members have been at the forefront of the drive toward quantifying just what benefits companies get from advertising and marketing. Companies are under constant pressure to perform financially despite a tough economy, and they're asking more and more for proof that advertising works. And they're not waiting for answers. They're developing metrics that tell them how their advertising boosts their bottom lines. ANA takes the effort seriously, devoting much time and energy to ROI. ANA is taking its ROI effort on the road, holding a series of one-day seminars on ROI and technology within the month in New York, Dallas, Chicago and San Francisco.

Liodice said that it's not that the old ways don't work; it's that in a changing media environment, companies need to advertise but need to find smarter and more cost-effective ways of doing it. One of those ways is addressable media, which although in its early stages brings an opportunity for targeting that hadn't been available before.