Wednesday, June 6, 2007

Leverage Shifts to the Advertisers

...and Nielsen will try to make both the advertisers AND the networks happy. They will not succeed. Why? Because it's obvious: the Networks had the upper hand and now they don't.

Check out this story from Advertising Age, in the face of the actual viewership data for the commercials themselves, what did the Networks focus on? Getting every sliver of a dollar for the DVR audience that might still watch the advertisements. This seems to imply that the networks didn't like the actual data at all and are searching for a way to stick with the old model.
I don't see them (the networks) getting away with that for long, if at all and I see this as a sign that Mark Cuban was more right than he knew. The leverage isn't moving in favor of the advertisers, I think it must have already moved. The advertisers have the upper hand now.

I note that Nielsen has shared still ZERO data with the general public on the ad ratings themselves (Nielsen too only focused on DVR viewership in their press release, which seems to indicate Nielsen sides with the Networks...Nielsen shouldn't have a side here).

All this noise without any data in the public...strikes me that the commercial ratings themselves may be worse than anyone wants to talk about. The DVR thing is merely a distraction until we see the real data for the commercials themselves. I can't help but feeling if it was "OH MY, PEOPLE LOVE COMMERCIALS! LOVE THEM!" we would have seen some data already. We didn't. That's bad news for the networks and good news for the advertisers.

1 comment:

Bill Gorman said...

The whole situation is screwed up.

Since the results of TV advertising in most cases cannot be measured [the outputs], they have always had to value it in another way, by viewership [the inputs].

That leads to all sorts of goofy behavior. This latest "we want to measure it this way, you want to measure it that way" is just the same argument with new wrinkles thrown in.

Reality is I think in most cases TV advertisers are just throwing their money into the wind. Sometimes it works, sometimes it doesn't but it's impossible to figure out. So it's impossible to figure out the value of the ad, so it's impossible to figure out whether buying it at *any* price is a good economic deal.

I'd have thought that the internet ad schemes of "pay per click" or "pay when the clickee actually buys something" would have gotten people thinking about how goofy the TV ad pricing scheme is, but no dice as yet.

I don't "side" with anybody. In reality, this is all an elaborate drama for what comes down to a badly run auction process. The networks sell their ad time for whatever they can get. Madison avenue really doesn't have any incentives to negotiate very much, they get paid a % [like real estate agents], and advertisers seem to fall in line, either because that's the way they've always done it or they fear if they don't advertise as before it's their ass if there's a problem.