TV explodes

TV explodes

: The other day, I said that the reduced take in TV’s upfront ad selling season was the tipping point — tipping the wrong way indeed — for broadcast TV. Here’s the next evidence making the case: An ad agency exec smells weakness and demands lower rates:

Advertising spending growth may slow from next year as TV networks in the U.S. are forced to cut rates as audience levels fall, Saatchi & Saatchi Chief Executive Kevin Roberts said at an industry conference.

Ad spending worldwide should increase 5 percent or 6 percent this year, Roberts, 55, said in an interview at the International Advertising Festival in Cannes, France. Annual growth will slow to an average of about 4 percent after 2005 as TV prices “come down,” he said late yesterday. “They will have to. Otherwise advertisers are going to leave the medium.” …

In the U.S., television networks “seem to be gouging advertisers,” Roberts said. “Their rates are going up and the return on investment is coming down.” …

Television will remain the largest advertising medium, Roberts said. “How it will be used will be very different. It will become more interactive.” Advertising will also change to be more “emotive” rather than “yelling at you,” he said.

New Media

The current year of TV programming, which runs into 2006, will be the “biggest ever year in history on television advertising,” Roberts said. “While the return on investment in television is deteriorating, because rates are going up, clients are still flocking to the medium.”

That will change over the next few years as techniques are developed to measure the effectiveness of ads in new media such as mobile phones and the Internet, he said.

“We don’t have enough pre-testing and measurement of emerging media. What we need is a bit of time behind us so that we get some empirical data” and advertisers will become more confident with such media.

And I will argue that advertisers are fools waiting for the perfect data when they could be using new media aggressively and still quite inexpensively and learning along the way. But, hell, they’re the fools with the money and so we need to build that data for them. And now is our opportunity, as TV explodes. [via Lost Remote]

And it’s not just TV. See also newspapers here and here and here and follow the links therein.