MARKET REPORT, NORTH AMERICA Cable muscles in on broadcast
Procter & Gamble has struck a rumoured $100m deal with Oprah Winfrey’s OWN network. Catherine Warburton and Dani Benowitz explain what this tells us about television in the US
The fact that P&G is looking to invest and align with content that fits its brand platforms is an indicator that the growth of cable continues to change the model of traditional advertising deals. The deal with OWN was struck ahead of the upfront TV marketplace where, each May, agencies negotiate an advanced purchase of TV time for their network clients, who typically sell 70- 80% of their inventory then. By purchasing time in advance,
advertisers are guaranteed audience delivery, preferential pricing, and better programming selection. For the networks, the ability to lock in a large percentage of orders is the lure. Last year’s upfront negotiations were
atypical with the dollars down about 20%. The networks reduced their asking prices in the hope that advertisers would return to spend in what’s called the scatter market (purchasing closer to the air date). As the economy improved, their bet paid off, although it’s unlikely that the nets will regain the volume of the 2008/2009 marketplace.
Migration to cable Primetime is a major driver of dollar volume, but as the audience fragments the dollars have followed. All the broadcast networks are trying to counter audience loss by investing in programme development, but it’s unlikely that they can halt the audience migration to cable and digital outlets. In the past 20 years, cable has more than tripled its audience share, while
broadcast continues to experience double-digit ratings erosion in all day parts. The advertising world has responded appropriately. According to MAGNA’s report, cable spending in the upfront has increased 61% over the past decade, while broadcast spend has declined 19%. This is down to relative pricing efficiencies versus broadcast television, niche channels and programming, plus award- winning content that is able to deliver broadcast-size audiences. Niche programming continues to dominate the cable landscape with networks such as TV Food and HGTV (Home and Garden) providing relevant programming. Primetime ratings on these networks have grown double-digit percentages versus last year. In recent years, cable networks have invested in content that is also critically-acclaimed. Programmes such as Mad Men, Breaking Bad, The Closer, and Damages have won Emmy and Golden Globe Awards. And the investment doesn’t stop
there. Programming typically reserved for broadcast has been picked up by cable networks – Turner has picked up Conan O’Brien’s late night comedy show and negotiated the rights to air NCAA college basketball tournament games, for example. Increasingly, agencies now have to balance client portfolios with both higher-reaching primetime and niche cable programming. ○
Catherine Warburton and Dani Benowitz are both EVPs, National Broadcast, at UM
PRIMETIME SEASON TO DATE RATINGS (SEPT 21 2009 – APRIL 25 2010)
TOP 5 CABLE NETWORKS ADULTS 18-49 Network
1. ESPN 2. USA 3. TBS 4. TNT 5. FX
Rating 0.91 0.87 0.75 0.62 0.50
Source: MAGNA Global analysis of copyrighted Nielsen data; includes all telecasts
www.mandmglobal.com
TOP 5 BROADCAST NETWORKS ADULTS 18-49 Network
1. FOX 2. CBS 3. NBC 4. ABC
5. Univision
Rating 3.0 2.6 2.5 2.2 1.3
Source: MAGNA Global analysis of copyrighted Nielsen data; includes telecasts; excludes sports
For the latest news go to
mandmglobal.com
OWN demonstrates cable’s growing strength
Key Statistics 73
Number of minutes that the average adult is exposed to live TV commercials each day
N. AM SIN 60ECONDS
Al-Jazeera launches in Canada u San Francisco Chronicle
relaunches with Bloomberg content u Wall Street Journal targets New York Times u US gets first tourism agency
Digital ads overtake print in the US; Newsweek up for sale
u Shaw to buy CanWest TV assets u Yahoo! acquires Citizen Sports u CBS and CNN resume partnership talks u Sorrell praises US rebound u Upfronts witness spend recovery u Hearst looks to buy iCrossing
FTC approves Google Admob deal u Privacy Bill scares
advertisers u US Advertising groups urge FTC to reconsider proposed restrictions regulating the impact of media on children
Yahoo! closes Text-ad network
85%
The percentage daily reach of TV ads among US adults, who typically see a total of 26 breaks
Source: Council for Research Excellence, May 2010 M&M Q2 2010 53
14%
Percentage of adults that switch the channels they are watching during commercial breaks
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