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November 22, 2003

Friday, November 21, 2003.

Friday, November 21, 2003. Unconventional
Television Week had a story a couple of weeks ago about Sean Cunningham, president of the the Cabletelevision Advertising Bureau (CAB), who announced that he was cancelling the organization's annual national convention this year and was going to invest the money in "some heavy duty number crunching instead" in order to accelerate the the flow of advertising dollars from broadcast television to cable.

In the weeks following the CAB's startling announcement, cancelling partying for research, the press was full of stories about the decline of boradcast television network audiences, especially men 18-34. When Nielsen first reported these declines, the networks were in denial. "There's something wrong with Nielsen," David Poltrack, the head of research at the CBS Televsion Network and dean of the network research heads, cried in complete denial, like an NFL player yelling at a referee about a call that he was out of bounds. Well, the instant replay is in and it shows Nielsen's early call was right--the audience for the broadcast TV networks is decling faster than ever.

The Jack Myers Report headline today was "Network Scatter Concerns Spreading to First Quarter," and the story detailed how the scatter market was looking a little stronger going into the Christmas buying searson after "...ratings erosion, which has left networks short of their budget goals." And Jack goes on to report, "The four large broadcast networks are reportedly experiencing fourth quarter (calendar)budget shortfalls ranging from $10 million to $40 million. NBC has been impacted by a reported $90 million in fourth quarter options (concellations) taken by advertisers." And, "...but NBC has experienced 12 percent ratings declines with significant erosions on their most valuable night, Thursday. Audience deficiency units reduce available inventory for sale, placing increased pressure on network sales departments to increase costs-per-thousands."

The Wall Street Journal had a story on the front page today with the headline "As Technology Scatters Viewers, Networks Go Looking for Them: With Its Ad Model at Risk, Industry Turns to DVDs, Video on Demand , Games." And the subhead, "The Trouble With 'Friends.'"

So it looks like the broadcast network's arguing with the referee were just whining, as they now admit their audiences are going away, despite their loud protestations. Why else would they be giving makegoods and trying other methods to increase their audiences like offering DVDs of their hit shows?

The CAB is making a smart strategic move to kick the networks while they're down and investing money in research to show agencies, and more importantly clients (because agencies have a vested interest in network television), that the emperor, in fact, has no clothes, and that a lot of money spent in broadcast television network advertising is wasted.

And what are the networks doing in response, as Jack Myers reports, they are raising their CPMs in order to make their quarterly budgets. Now, how smart is that?

Posted by Charles Warner at November 22, 2003 9:09 AM

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