Marketers, Networks Must Break Their TV Dependence

An Ad Age Editorial

Published on .

Looking at the projected CPM increases in this year's upfront take, one couldn't be faulted for wondering if marketers, as a group, were just a little bit stupid. Every year the networks deliver a little bit less, yet every year they demand more for their diminished number of eyeballs. And every year, marketers, like a bunch of strung-out junkies, make a little noise about the indignity and then pay up anyway.

Of course, it's a little more complicated than that.

The fact is that TV -- network TV in particular -- is still the best way to reach wide audiences. A 2005 time-use study from the Department of Labor shows that consumers spend half of their leisure hours watching TV. And consider this: While the series finale of HBO's "The Sopranos" was heralded as a TV event, something that had the entire nation talking, the 11.9 million people who tuned in is about the same number of people watching NBC's "America's Got Talent," a summertime variety show. Or put another way, that's about a third of what "American Idol" pulls in during the regular season.

So network TV still delivers a strong kick, even if it's not what it once was. And a look at the numbers shows that major marketers are slowly (really slowly) weaning themselves off the habit.

The top three network advertisers -- Procter & Gamble Co., General Motors Corp. and AT&T -- are all on the record as wanting to shift large amounts of money from traditional measured media, whether it's to more narrowly target their ad messaging or realize substantial cost savings or both.

In reality, the networks have made the bigger mistake: They've gotten hooked on their own product. They know they need to offer something better. Indeed, many are making stumbling attempts at including web and other digital offerings in their deals. But old habits die hard, and it's so much easier to argue about live-plus-three numbers. So they charge more to compensate for their declining ratings, and the cost is passed on to the advertisers, who pay it begrudgingly.

This may have the overall effect of making it look like the networks are getting one over on marketers, but those higher prices will do little more than keep revenue flat. And once the supply of TV viewers really starts drying up, the marketers will have plenty of other options, while the networks will be left trying to peddle last century's product.
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