The New York Times is running an article that says advertisers are sticking with their network broadcast commitments despite the lack of new television programming, because there isn’t a better alternative at the moment.
In a column on Wednesday, Wayne Friedman, the West Coast editor of MediaPost, noted that broadcast television continues to deliver a significant audience.
“Where can advertisers turn?” Mr. Friedman wrote. “Not to the Internet right now; it’s not ready. Some money may go to cable, as well as syndication, or even local TV. But the bulk of TV advertising points will still remain on network TV.”
The internet’s not ready? Harsh.
Advertisers are seeking a certain amount of gross ratings points, which correlate to audience numbers. So if ratings decline, they need to purchase more commercial time to reach the same number of people. The phenomenon has brought about a remarkably strong market for the commercial time that was not sold in advance during last year’s upfront period.
“It’s a function of the fact that there is a scarcity of ratings points in the marketplace. As a result, that’s putting upward pressure on pricing,” said Rino Scanzoni, the chief investment officer of Group M, a unit of the advertising giant WPP Group. In other words, as television viewership decreases, the price of advertising increases.
Can someone please explain this insanity?