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November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Thursday, January 29, 2004
TV Ad Effectiveness & Viewers Fall
Major TV networks are losing viewers, and they're in a panic about it. NBC plans to rollout the new shows this year following its coverage of the Summer Olympics instead of waiting for the traditional autumnal kickoff. Jeff Zucker, president of NBC Entertainment, News, and Cable said recently that he is also looking at a 52-week schedule in the future.

Such a move if adopted by the rest of the industry would lessen the importance of sweeps -- the concentrated time period that has determined advertising rates for local TV. Further change will come with Nielsen's new people-meter service, scheduled to roll out in Boston later this year and then move into other major markets. It could well be the death knell for sweeps. If so, local TV advertising rates will correlate more accurately with the number of viewers.

The increasingly fragmented TV viewing audience is spread thin by an abundance of cable and satellite offerings. The Internet has taken ownership of a large chunk of what previously had been viewing time as growing broadband access makes Web surfing easier and more responsive.

An example of the problems facing TV advertising revenues can be found in Cap Gemini Ernst & Young's research on agents of influence in the car-buying process. Car advertising is TVs largest category, but only 17% of US consumers said TV advertising influenced their decisions. On the other hand 26% cited ads on Internet search engines, and 48% pointed to direct mail from a dealer. The largest influencer was word-of-mouth at 71%.

When advertising agency heads and other such gurus start touting TV's value because it shows pictures of the cars or talk about it as a "thought-starter" watch out. Such statements are apologies for a medium that isn't delivering numbers or results equal to its cost. Look for network and local TV advertising rates to drop as the number of viewers continues to decline and more accurate audience measurement tells the truth. Companies trying to reach business owners and other purchasing decision-makers, should be better able to bargain for lower TV ad rates. But the real payoff will be for those who find more directed media early.
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