Commentary

Resetting The TV Ad Market: Is This What A Troubled Economy Will Bring?

Reset prices for the upfront? That's supposedly what Procter & Gamble and other marketers want to do.

But the odds are not in their favor -- any more than my IRA mutual funds will be reset to the levels back to what they were in March.

The marketplace was what it was, when it was. Now some TV advertisers want to change the rules. It is no longer good enough that TV marketers have option clauses allowing them to cancel 25% of their first quarter upfront buys, or 50% in each of the second and third quarters. Lots of them want a do-over.

TV marketers are on pins and needles wondering if P&G, and other really big TV marketers, will get their way -- leaving others behind. Everyone will talk "partnerships" and "long time relationships" and the fact that TV is in trouble, what with the Internet, broadcast ratings erosion, and DVR concerns.

To their credit, TV national sales executives don't talk about "resetting" the upfront when the following scatter market program prices soar by double-digit increases.

While big media companies have seen their local TV advertising sales slipping -- missing big upside opportunities such as this year's political and Olympic advertising season -- national TV has been holding its own, up until now.

If TV marketers want to really put their money where their mouth is -- or more likely, spit it out -- the road is an easy one. Cancel all that's allowable in second quarter upfront commitments, and buy way less in next year's upfront process.

Analysts have been calling for an end to the TV upfront marketing process for over a decade now. But this hasn't happened -- not even a hint of it though the last few economic downturns.

We are all told this recession is a new ball game: Toyota Motor Corp. took its first-ever quarter loss in its 70-year history; all advertising could be in an unprecedented three-year slide; recent big home values may not come back -- for decades.

Maybe we should all start imagining other first-time-ever TV business news.
1 comment about "Resetting The TV Ad Market: Is This What A Troubled Economy Will Bring? ".
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  1. John Billett from ID Comms, December 24, 2008 at 4:35 a.m.

    Media prices are falling world wide as supply outstrips demand. What's so special about US Network TV? If advertisers continue to pay premium prices for discounted inventory, then hurry on the day when marketers get out of the kitchen and leave investment to those who understand what value is all about. Put those marketers in front of the shareholders at the company agm and get them to justify premium prices to shareholders who have seen their stock fall into oblivion. They would be sacked without trace

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