Media Marketing Guide 2010

Your Media Questions Answered: TV

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Brian Steinberg
Brian Steinberg
Does anyone under 30 watch live TV these days?

You betcha -- but less, perhaps, than other generations. According to Nielsen, kids between the ages of 2 and 11 watch just 25 minutes and 48 seconds of live TV each week. Keep in mind that these viewers are likely not encouraged to watch the cop shows and saucy comedies that air at 9 p.m. and 10 p.m., and may watch less TV overall when compared to their elders. At the same time, the habits TV's youngest viewers are forming -- more content than ever is available via video on demand, and some of these kids may never know a day when they had to sit in front of the TV at a specific time and date in order to watch their favorite program -- are giving rise to what may be the first truly "on-demand" generation.They expect shows to appear at the snap of a finger or the click of a remote or mouse.

How serious a threat is "cord cutting"?

Despite a spate of news stories depicting a nation of video addicts who simply download the content they want via a jacked data connection, research suggests more consumers are making sure they have a more established connection both to TV programming and web and data services.

It's true that there's been some churn. In August, SNL Kagan found that the U.S. multichannel industry -- comprising cable, satellite and telecommunications providers -- lost 216,000 customers in the second quarter of 2010 compared to a gain of 378,000 in the year-prior period. The research firm cited unemployment and a weak housing market as factors.

Yet, according to a report issued in February 2010 from the Leichtman Research Group, the multichannel video industry added 580,000 subscribers in the first quarter of this year. And while the company found that the nation's top 10 cable providers had lost about 1.4 million cable TV subscribers in the year ending the first quarter of 2010, the number was offset by gains of 1.33 million satellite-TV subscribers and 1.78 million subscribers to telecommunications-based TV services such as Verizon's Fios and AT&T's U-Verse. Leichtman also found that in communities where cable TV was available, 89% of households with a TV set subscribed to some form of multi-channel video service -- a new high.

Why do prices for broadcast seem to go up when the ratings keep going down?

Don't be confused by industry jargon. Unit prices for many top shows are in decline, as one might expect when the number of people watching TV on a specific day or date is on the wane -- and the number of people watching the ads that support them is even less. What's going up is something known as a CPM, or the cost of reaching 1,000 viewers -- a measure that advertisers use to judge how their TV spending works for them. Because fewer people are watching TV in traditional fashion, getting an ad in front of 1,000 people can require more airings of the commercial. In the last upfront, networks managed to cadge CPM increases ranging from 7% to 10% after agreeing to rollbacks of 1% to 3% in the year-earlier session. Bottom line? It costs less to advertise on broadcast TV, but more to reach the sheer number of people that make TV advertising effective.

When will interactive-TV -- and all the gee-whiz ad gimmicks we keep hearing will come with it -- become reality?

Patience. There are plenty of interesting experiments in the marketplace, and even some projects that have gained traction, but the growth of interactive and addressable TV advertising is slowed by technology and the many disparate providers of video service to consumers. You want to put an ad out in front of the greatest number of people possible? Easily done -- put it on ABC, MTV, TBS or CBS. You want to put an interactive or addressable ad out to a similar number? That's a much tougher task. Why? Because those types of ads are distributed by a wide range of cable, satellite and telecommunications providers -- and the wires and boxes they place in consumers' homes -- so it's much harder to devise one ad that works across all those platforms. Instead, it's up to each marketer (and their agencies) to try to build scale by crafting individual deals, then managing them all with a national audience in mind.

Brian Steinberg is Ad Age's TV editor.
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