Upfront is "Up"

Hard to believe, but the networks pulled out, according to AdAge, an increase in upfront commitments. The take increased 2.7% over last year.

This happened despite the new ratings indicating an audience decline of 5%-10%. As I mentioned previously, the networks' response of raising rates actually worked!

The argument the networks used was "Hey, you can't get to mass audiences any better". They invoked what I call "the reach premium". The argument is that if you want to cover a large percentage of the US audience with your campaign, you need to buy those with the largest reach to efficiently ensure they get the message. Since there are only so many networks with big reach, they can ask for a premium.

Will local television be able to hold the line on revenues with local advertisers? We'll see.

Read Ephron on Media

An occasional email I get in my inbox comes from Erwin Ephron, who writes about media planning. His latest post says what everyone in the game knows, and I have been warning advertisers since I started this blog.

He wonders why the Upfronts are not "Open, Candid, Honest", like you can get from eBay (Google, MSN, etc.).

In the national buying party called Upfront, Ephron says:

"Most advertisers do not know the market price of TV, they know only what they are paying compared to last year. A real dollars-paid database like the performance monitoring service MPMA’s shows cost differences of 30% for identical TV inventory bought by different advertisers, Upfront."

In fact, sellers' entire planning process centers around what each advertiser paid last year --- no thought of a transparent market!

In fact, at a local TV level, prices can vary by more than 100%! In other words, because TV ad sales are NOT "Open, Candid, Honest", sellers can charge what they can get, and non-vigilant advertisers get fleeced.

No wonder that as smaller advertisers who sense they are getting fleeced are fleeing to the aforementioned Open, Candid, Honest alternatives, like Internet.

The sales tactics practiced by the TV sales organizations have to be changed to allow them to thrive in the accountable ad market ahead.

Restaurant Raises Prices Due to Drop in Quality!

Ok. That headline is bogus, but the one in Advertising Age is not! Networks Ask for Steep Increases to Make Up for Ratings Shortfall!

Seems that the new (more accurate) ratings system from Nielsen shows that people actually do skip ads with their DVRs! So the networks are say: "Well then, you need to pay us more per (actual) thousand!"

The article closes with:

"New technology is also giving marketers other venues in which to place their ads, including blogs and e-mail. Due in part to some of these factors, last year's upfront take was one of the lowest in several years, estimated at $8.5 billion to $9 billion, and marked the second straight year where networks took in declining volumes. "

So, why would you pay more, for less?

Now That's the Idea! Local TV on YouTube

TV Week reports that Hearst-Argyle, arguably one of the more forward-thinking TV groups, has signed a deal with YouTube to allow its real hard asset: local content, to be broadcast on YouTube.

As I have said many times before, local TV has to re-think itself. Viewers are drifting away. Advertisers want a more accountable, measurable relationship.

This type of move does both. It places unique assets in a popular medium, where advertisers really can interact with their audience .. and get measurements that are "real" ... for the investments they make.

This is the right step. Expect more from all the others.

Now Cable Viewing Declines

Catch the Variety article.

For cable TV, May proved to be the cruelest month, at least in the Nielsen
ratings: Nine of the top-10 ad-supported networks declined in number of total
viewers, five by double digits

This isn't supposed to be happening (yet) ...