Network TV Seeks New Advertisers
Network TV has taken a major advertising hit in the last year, with investments in advertising coming in at 20% less than the previous year for the five major broadcast networks.
Advertisers are reportedly holding back their inventory due to the struggling economy, hoping to make smarter plays later in the game, or withholding their advertising dollars altogether if it looks like the networks canít offer a good enough ROI.
The networks responded by holding back more time than usual this year because of the price cuts demanded by their advertisers. 2010 network TV ad spending may be down as much as 7% in 2010, and PricewaterhouseCoopers recently predicted that the networks wonít get back to their pre-recession ad revenue of 2008 until 2013 at the earliest.
Another troubling problem for the networks is the uptick in DVR usage. A new report by TiVo indicates that more and more consumers are skipping the ads, making those time slots much less valuable to potential advertisers.
The popular program 30 Rock, for example, saw nearly 75% of the viewing audience skipping the ads, effectively cutting the potential audience for those advertisers to a quarter. That makes the time slot about a fourth as valuable as it once was Ė perhaps less, depending on the demographic doing the most skipping.
Local stations have also seen a hard hit in revenue, with the Television Bureau of Advertising reporting a drop of 26%. Auto spending makes up the bulk of that revenue dip, as the drop in consumer purchasing caused many auto makers to stop buying the spots that make up the bulk of local station ad revenue. Cash-for-clunkers helped relieve that pressure a bit during the 3rd quarter of 2009.
Posted at 09:04 am by Peter Koeppel