Network television has been taking a hard hit from the recession, with their advertisers pulling out at the last minute and bidding much lower for the time slots that used to bring in the major advertising dollars.
Since it gets much smaller numbers in terms of viewers, it’s easy to think that cable would be, if anything, in even more trouble than network when it comes to bringing in advertisers.
Turns out that isn’t so. Advertisers cut their budgets for television by $10 billion in the first two quarters of 2009, but cable actually managed to grow nonetheless, getting up to nearly $8.8 billion, a 1.5% increase from last year. Granted, these aren’t exactly mind-shattering growth numbers, but they’re still extremely impressive when you consider that television advertising overall took such a major hit.
The upfronts are of course the most looked-to barometer for how well network television is doing, and the numbers are consistent with the advertising reports overall. Upfront spending dropped 12% to just $6.7 billion. This doesn’t necessary mean that network advertising spending is as bleak as many would speculate from upfront numbers alone, because the recession has forced many companies into a “wait and see” philosophy rather than gambling on the future success of a show.
Even more telling, sellers are depending more on “scatter” than ever before, which continues to improve the return on investment for advertising budgets. The amount of airtime held back for scatter could cause a large excess of unsold inventory, which may very well turn into a bidding war as air time gets closer. Even if such a scenario occurs, it’s not likely to turn out well for the networks, since they need to fill that air time and may need to sell that inventory at lower rates.
While network takes a thrashing, cable is expected to grow over twice as fast this year, with a 3.6% increase to $20.2 billion in 2010.
Saturday, March 20, 2010
Sunday, February 21, 2010
Is Online Advertising Really a Better Option Than Television?
Setting aside the question of legality, the availability of full-length TV shows has been growing by leaps and bounds since the first arrival of YouTube, but the battle to make some money off of the venture has been proceeding at a snail’s pace by comparison.
In the last year or so, quite a few leaps have been made to ensure large media outlets get paid for their show’s popularity online in forums like Hulu, where they can run short ads when someone views old and current TV shows.
The rush to make money in online channels has created a lot of buzz as executives fear they’ll lose their television ad revenue as viewers switch to watching online. Their fears seemed founded: TV ad rates are less than they have been in previous years, as advertisers scale back their marketing budgets to accommodate their dwindling revenues.
Online advertising is cheaper and seemed to be reaching a wider audience. Even as they learned to make money through online ads, television execs were concerned for their dwindling revenue overall.
They may not need to be concerned. A new survey by eMarketer indicates that while online ad revenue is fast growing, TV advertisers will actually spend less per hour of viewing than their online counterparts – by a stunning 38%.
Maybe it isn’t time to give up the ghost on old-fashioned TV advertising after all; in short order, it could be cheaper to reach the same audience on the tube than on the net.
In the last year or so, quite a few leaps have been made to ensure large media outlets get paid for their show’s popularity online in forums like Hulu, where they can run short ads when someone views old and current TV shows.
The rush to make money in online channels has created a lot of buzz as executives fear they’ll lose their television ad revenue as viewers switch to watching online. Their fears seemed founded: TV ad rates are less than they have been in previous years, as advertisers scale back their marketing budgets to accommodate their dwindling revenues.
Online advertising is cheaper and seemed to be reaching a wider audience. Even as they learned to make money through online ads, television execs were concerned for their dwindling revenue overall.
They may not need to be concerned. A new survey by eMarketer indicates that while online ad revenue is fast growing, TV advertisers will actually spend less per hour of viewing than their online counterparts – by a stunning 38%.
Maybe it isn’t time to give up the ghost on old-fashioned TV advertising after all; in short order, it could be cheaper to reach the same audience on the tube than on the net.
Tuesday, January 5, 2010
Advertisers Win the Battle for Lower TV Rates
TV giants have been saying they don’t intend to lower their TV rates, no matter how bad the recession gets. After all, it’s still valuable real estate that reaches millions of viewers.
There’s news leaking out that the giants are sinking bit by bit, though, and that’s made them slightly more amenable to negotiating lower rates. The price drops are small, by all accounts – but when the TV networks had been saying they wouldn’t budge at all, even a small drop is a big victory for advertisers.
Broadcast networks have been seeing fewer advertisers willing to spend big money for TV spots for the last year. Declining ratings and the auto industry’s difficulties are also contributing factors, seeing as car ads are one of the most common appearances on TV.
The upfronts are also looking at a makeover. Previously, TV networks would sell commitments to deliver viewers, usually in lots of 1,000 viewers. They would also save some commitments to sell when the commercials were closer to air time, in hopes of negotiating a higher rate if the show were doing well. Advertisers preferred buying in advance if the show did well; the networks preferred selling late.
Now that trend is reversed. Hewlett-Packard has decided to wait and see if the audience they’re seeking actually tunes in, abandoning the upfronts. If their reaction is any indication, networks may have to cut their rates simply to pull in those upfront dollars – though for some, it’s worth the risk to wait.
Rather than get low, but guaranteed, upfront rates now, the networks may take a chance on the strength of their shows and hope for higher rates when it’s closer to commercial time. It’s a lot of pressure on the fall lineup.
There’s news leaking out that the giants are sinking bit by bit, though, and that’s made them slightly more amenable to negotiating lower rates. The price drops are small, by all accounts – but when the TV networks had been saying they wouldn’t budge at all, even a small drop is a big victory for advertisers.
Broadcast networks have been seeing fewer advertisers willing to spend big money for TV spots for the last year. Declining ratings and the auto industry’s difficulties are also contributing factors, seeing as car ads are one of the most common appearances on TV.
The upfronts are also looking at a makeover. Previously, TV networks would sell commitments to deliver viewers, usually in lots of 1,000 viewers. They would also save some commitments to sell when the commercials were closer to air time, in hopes of negotiating a higher rate if the show were doing well. Advertisers preferred buying in advance if the show did well; the networks preferred selling late.
Now that trend is reversed. Hewlett-Packard has decided to wait and see if the audience they’re seeking actually tunes in, abandoning the upfronts. If their reaction is any indication, networks may have to cut their rates simply to pull in those upfront dollars – though for some, it’s worth the risk to wait.
Rather than get low, but guaranteed, upfront rates now, the networks may take a chance on the strength of their shows and hope for higher rates when it’s closer to commercial time. It’s a lot of pressure on the fall lineup.
Thursday, December 10, 2009
Research Creates Better Strategies for Web Advertising
In the early days of television, advertisers had no idea how to capture audience attention in the new medium. The only precursor to TV advertising was print or radio ads, so they did the best they could to use those experiences and apply them to an entirely new focus.
Today, we’re looking at a similar problem with web advertising. We know print ads. We know TV ads. But do we know web ads?
Research being conducted by the Walt Disney Company suggests that we don’t know it nearly as well as we think. In the research labs, volunteers are asked to scroll through websites while researchers observe them through one-way glass, recording the movements of their eyes as they track objects and text on the screen. One ad catches the reader’s attention. Another goes by unnoticed. What made the difference?
That’s what the Disney researchers are attempting to discover.
Their methods are fairly straightforward, trying out different combinations of ad types and sizes in different places on the web page to see which are most effective at capturing and holding attention. The research also includes keeping records of heart rate, skin temperature, and facial expressions so that enthusiasm can be recorded.
The Starcom MediaVest Group considers Disney’s research “invaluable,” and Allstate, Kellogg and Bank of America are also getting in on the action.
Today, we’re looking at a similar problem with web advertising. We know print ads. We know TV ads. But do we know web ads?
Research being conducted by the Walt Disney Company suggests that we don’t know it nearly as well as we think. In the research labs, volunteers are asked to scroll through websites while researchers observe them through one-way glass, recording the movements of their eyes as they track objects and text on the screen. One ad catches the reader’s attention. Another goes by unnoticed. What made the difference?
That’s what the Disney researchers are attempting to discover.
Their methods are fairly straightforward, trying out different combinations of ad types and sizes in different places on the web page to see which are most effective at capturing and holding attention. The research also includes keeping records of heart rate, skin temperature, and facial expressions so that enthusiasm can be recorded.
The Starcom MediaVest Group considers Disney’s research “invaluable,” and Allstate, Kellogg and Bank of America are also getting in on the action.
Friday, December 4, 2009
Getting Around the TiVo Ad Problem
Cable TV networks have long bemoaned TiVo as a way for their consumers to get around watching regular advertisements. And lately, they’ve also been getting a lot of pressure to put their shows online for free as many stations and networks already do – a double whammy for advertising and a serious threat to the cable networks’ profits.
Comcast is bouncing back with a double whammy of its own: In a test of consumer response, it’s launching several TV shows from a handful of major media companies – including CBS and Time Warner – into online venues. The catch? You can’t watch them unless you’re already a cable subscriber, and the online shows have the full panoply of advertisements, just as they would if you watched them on the tube.
There’s some argument as to whether consumers will accept the new dynamic after having been introduced to full-length TV shows, including many cable network shows, in an online forum for free. Beyond the cost issue, one of the benefits of watching a TV show online thus far has been the drastically shortened advertisements.
In a 30-minute show, for instance, viewers might see only two minutes’ worth of commercials – that’s about 8-10 minutes less than their normal exposure to commercials during the course of a show that length.
TV networks are working on finding a happy medium. More ads than the current brief spots might still be palatable to consumers. After all, fewer ads are still fewer ads – even if those online spots get a little longer than they are currently, they’ll still beat out their TV counterparts.
Comcast is bouncing back with a double whammy of its own: In a test of consumer response, it’s launching several TV shows from a handful of major media companies – including CBS and Time Warner – into online venues. The catch? You can’t watch them unless you’re already a cable subscriber, and the online shows have the full panoply of advertisements, just as they would if you watched them on the tube.
There’s some argument as to whether consumers will accept the new dynamic after having been introduced to full-length TV shows, including many cable network shows, in an online forum for free. Beyond the cost issue, one of the benefits of watching a TV show online thus far has been the drastically shortened advertisements.
In a 30-minute show, for instance, viewers might see only two minutes’ worth of commercials – that’s about 8-10 minutes less than their normal exposure to commercials during the course of a show that length.
TV networks are working on finding a happy medium. More ads than the current brief spots might still be palatable to consumers. After all, fewer ads are still fewer ads – even if those online spots get a little longer than they are currently, they’ll still beat out their TV counterparts.
Sunday, November 22, 2009
Could That Web Ad Contain a Virus?
Hackers can be smart people and they have started to strategize to expand their reach and attract new victims.
Online advertising is specifically designed to target a large number of people, often in a specific demographic, and hackers are piggybacking on those marketing efforts to land some serious viruses right where they’ll do the most damage.
The strategies of these hackers usually involve taking over a currently existing ad and infecting it with malware. When interested customers click on the perfectly legitimate company ad, they’re also downloading a vicious virus into their company – unbeknownst to either them or the advertising company.
Companies are responding to the virus problem with serious investments in Internet security in an attempt to protect their customers. Obviously the malware-ridden ads can seriously damage a company’s reputation, as consumers get the impression that doing business with them only leads to potential damage to their computers and personal information.
To keep their names out of the mire, companies have worked hard to remedy the problems as soon as they occur and get the ads taken down within a few hours. Unfortunately, a few hours is all it takes for a well-positioned ad to reach thousands of customers, many of whom will be infected with the malware.
Online security may become one of the few places companies are willing to invest more money, even in a rough economy. With web advertising one of the few marketing strategies that is showing growth, companies can’t afford to have those dollars get killed by a virus.
Online advertising is specifically designed to target a large number of people, often in a specific demographic, and hackers are piggybacking on those marketing efforts to land some serious viruses right where they’ll do the most damage.
The strategies of these hackers usually involve taking over a currently existing ad and infecting it with malware. When interested customers click on the perfectly legitimate company ad, they’re also downloading a vicious virus into their company – unbeknownst to either them or the advertising company.
Companies are responding to the virus problem with serious investments in Internet security in an attempt to protect their customers. Obviously the malware-ridden ads can seriously damage a company’s reputation, as consumers get the impression that doing business with them only leads to potential damage to their computers and personal information.
To keep their names out of the mire, companies have worked hard to remedy the problems as soon as they occur and get the ads taken down within a few hours. Unfortunately, a few hours is all it takes for a well-positioned ad to reach thousands of customers, many of whom will be infected with the malware.
Online security may become one of the few places companies are willing to invest more money, even in a rough economy. With web advertising one of the few marketing strategies that is showing growth, companies can’t afford to have those dollars get killed by a virus.
Friday, October 9, 2009
Social Media Beats Out Conventional Marketing for Procter and Gamble
Social Media Beats Out Conventional Marketing for Procter and Gamble
If we had any doubt that social media was the future wave of marketing, there’s a case study recently put out by Procter & Gamble that will make you think twice.
Josh Bernoff, the co-author of Groundswell, demonstrated a social media technique that P&G judged four times as effective as their usual marketing tactics. Dollar for dollar, the social media approach was four times better.
Shhh…don’t talk about that product
P&G was marketing tampons, a product that no one especially wants to talk about directly, much less in advertising. So instead of marketing their products through conventional methods, P&G created a website called beinggirl.com, where its users could talk about anything from parents to music to problems at school to health issues – including, naturally, subjects that were handy lead-ins to tampon use.
They didn’t go for the direct sale, though. In sections where it was relevant, they simply put in a small message: brought to you by Always maxi pads and tampons. That simple technique – a place to open a dialogue and a small reminder about the host – was four times as effective as other tactics.
If we had any doubt that social media was the future wave of marketing, there’s a case study recently put out by Procter & Gamble that will make you think twice.
Josh Bernoff, the co-author of Groundswell, demonstrated a social media technique that P&G judged four times as effective as their usual marketing tactics. Dollar for dollar, the social media approach was four times better.
Shhh…don’t talk about that product
P&G was marketing tampons, a product that no one especially wants to talk about directly, much less in advertising. So instead of marketing their products through conventional methods, P&G created a website called beinggirl.com, where its users could talk about anything from parents to music to problems at school to health issues – including, naturally, subjects that were handy lead-ins to tampon use.
They didn’t go for the direct sale, though. In sections where it was relevant, they simply put in a small message: brought to you by Always maxi pads and tampons. That simple technique – a place to open a dialogue and a small reminder about the host – was four times as effective as other tactics.
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