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PAY MORE, GET LESS

June 15, 2011

The major networks have wrapped up their “upfront” selling season. This is an annual event where broadcasters try and sell up to 75% of their ad inventory for the season to major clients. According to the leading TV rating service, Nielson, about 8.7% fewer adults under 50 years old watched prime-time shows on the five most-watched networks. So are rates going down? No, spending on prime-time shows grew in dollar terms for the second consecutive year, network executives reported. Rate increases ranged from 8% to 16%.

Why would you pay more for fewer viewers?  Because TV remains one of the last “mass media” options that has the ability to “reach” almost everyone in a market. As I point out in my book (www.powershiftmarketingbook.com), the internet is the greatest “one-on-one” advertising media ever created; however, using the internet to reach a mass market is difficult. Advertising on hundreds or thousands of websites for similar impact is, at this point, not very practical. I agree with the Wall St. Journal, “The most-watched TV networks are becoming more valuable in an ever-fragmenting media landscape, even if the bar for being most-watched slips a little each year.” Bottom-line: The reach of TV is hard to match even in today’s over-heated internet ad world.

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