'Without Advertising, We Will Damage This Country'

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NAPLES, Fla. (AdAge.com) -- With shrinking margins, fragmented audiences and an aging network TV viewing base, Jamie Kellner,
Photo: Gerard Burkhart
Jamie Kellner of Turner Broadcasting told the crowd that 'Without advertising we will damage this country.'
chairman-CEO of Turner Broadcasting System, is worried.

"I've been a fragmentor," Mr. Kellner told the audience at the Association of National of Advertisers's national conference in the Ritz-Carlton Naples ballroom this morning. "I'm starting to get nervous we're too fragmented." He said that as technology and program development costs increase, squeezing profits, some players could be forced to drop out. "All things good for consumers are not necessarily good for the economy."

Avoiding ads
The 55-year-old executive -- who heads of one of the largest cable companies in the U.S. -- told the gathering of marketers that he is worried about the impact of personal video recorders, the shifting demographics and habits of the broad TV audience and the growing determination of many consumers to use various technologies that enable them to acquire content but avoid advertising.

"I'm not against PVRs," he was quick to note. "I've

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used it myself." But, he warned, "the business cannot exist as its current model is today unless consumers are willing to give time for you [marketers]. I believe advertising has driven this country. Without advertising, we will damage this country."

His answer is for marketers to increase media buys aimed at high-spending younger viewers. Mr. Kellner also urged marketers to support "multiplexing," the growing trend of sharing content across more than one network. Others have called it "repurposing." He contends that programs played multiple times in one week, either on the same network or on another, can deliver two to four times more viewers with little duplication. "Try to expand your reach and be an innovator," he said.

Turner's young viewers
Not surprisingly, Mr. Kellner's call to action specifically involves tapping younger viewers through his Turner channels, including the WB, TBS, TNT and CNN Headline News. He claims that with half the U.S. population between the ages 18 and 49, and 54% of the WB audience comprised of that group, Turner properties draw a disproportionately more youthful audience than the Big Four networks. "We have to find a way to make cable more important to you," he said. To that end, Turner is "paying a lot for big movies," like Shrek and Charlie's Angels.

Because most marketers have been slow to divert their media dollars from network TV to cable -- Mr. Kellner said 75% of media dollars are directed at broadcast networks, which control only 45% of viewers -- Turner funded a massive study of Generation X consumers and their younger Gen Y, or "millennial," counterparts to show they are far removed from the channel-surfing, ad-averse slackers conventional wisdom has long held them to be.

"We now know that isn't true," said Dr. Jack Wakshlag, chief research officer for Turner, who divulged little detail but offered his e-mail address for marketers to request a full presentation when the study is complete.

Conducted by Copernicus Research, the study will be released by the end of November. It tracks the customer lifetime value of Gen X and millennial consumers across 12 product categories, along with attitudes about advertising.

Powerful under-40 crowd
Mr. Kellner introduced early results from the study to a full ballroom here. He said that as the big four networks' audiences age, marketers must "protect the younger flank" by investing ad dollars against the increasingly powerful under-40 crowd.

"They [under-40 consumers] rival or exceed the baby boom generation [in size and spending], and every year will become more and more important," he said. He then used his 30-year-old daughter's spending habits as an example.

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