Terry Heaton's PoMo Blog  
"Postmodernism is a change-or-be-changed world. The word is out: Reinvent
yourself for the 21st century or die! Some would rather die than change."Leonard Sweet, cultural historian.
03/23/2006 Entry: "(More) bad news for broadcasters"
A new study from Forrester predicts that 2007 will be the year that the television industry experiences an actual full-year decline in ad revenues. This conclusion was reached by speaking with 133 major advertisers, people who control over $20 billion in annual ad purchases. The study was done for the Association of National Advertisers (ANA) and presented yesterday at the ANA's TV Ad Forum in New York. Here are some pertinent paragraphs from a ClickZ story on the research: ...78 percent of these marketers feel the potency of their television advertising has declined in the last two years. ...once DVR penetration grows to above 30 million households, 24 percent said they intend to cut their TV ad budgets by at least a quarter and reallocate that money to online advertising, product placement and other channels. The Internet fared particularly well in major advertisers' future plans. Eighty percent said they'll invest more in Web advertising, and 68 percent singled out search marketing as a source of future spending. Smaller percentages said they'd pursue program sponsorships, product placement and online video ads. ...Forrester analyst Josh Bernoff, who authored the study, noted the argument put forth by many in television that increased spending on the Web will come out of marketers' direct marketing budgets, leaving the traditional ad mix relatively unaffected. He said the results of the ANA study do not bear that out. "I think advertisers are telling us, 'No, that's not how we think of it,'" said Bernoff. "They have a media mix, and it includes TV... and it includes Internet. They're saying they're going to take money out of television and put it into [online] advertising. They're not going to take money out of direct marketing and put it into advertising."
This tracks with what I hear in my travels and in discussions with those in a position to know. The 30-second spot is headed for the tar pits, and, as I've noted countless times, that's big trouble for broadcasting. But here's the real nut of it all. Revenue isn't the problem for television; audience is the problem. Local broadcasters and networks both would do well to accept that and move forward with strategies to find and engage the people who used to passively participate in our money tree. Meanwhile, streaming video guru Adam Gerber, CEO of Brightcove, offers an interesting read today in MediaDailyNews about what the video industry would look like if broadcast television had never been invented. Read the piece, and you'll come away with a rather revealing picture of where we're headed. Here's the key paragraph: If TV didn't exist and someone just dreamed up the idea today, the concept would be much richer than just programmed video. It would include engagement elements that enable consumers to involve themselves with programming and advertising. We'd end up with an open video distribution model, driven by content and consumer needs. Most important, we'd have a model without the burden of legacy business issues: intrusive ad models, gated distribution arrangements, and prohibitive talent/rights fees.
Good stuff -- scary for those entrenched the "legacy business issues" to which Mr. Gerber refers -- but it's where we're headed.
"The future is not something we enter. The future is something we create."Leonard Sweet
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