A spiraling economy mixed with sluggish ratings was not the cocktail that network television needed this holiday season. The networks hope the new year is better. Even if ratings pick up as shows like American Idol and Lost return in the first quarter of 2009, the industry wonders if ad dollars will follow.
With the TV business watching Detroit and Washington these days, Initiative USA President Tim Spengler spoke to B&C Business Editor Claire Atkinson about pricing, what may move the needle in the short term, and who actually stands to benefit from the storm currently rocking network television.
What's your outlook for the ad market in 2009?
It's not going to be great. How bad? It's too early to tell. It's about as unpredictable as I've ever seen. We are waiting to see what the government is going to do with the auto category. We just don't know how bad the consumer is going to feel it. There are too many variables. [The holiday season] is one, the government stepping in is another. Are those the only shoes to drop or is there some other shoe? [This] is going to be one of the very, very few down markets for ad spending.
How does the fourth quarter look?
We are two thirds through and it has held up pretty well, with the exception of some sports softness in December. Pharmaceuticals and retail had ad commitments from the upfront and they were ordered.
There has been money coming in each week, but the ad market didn't dry up and we are fairly well into the quarter. December is slowing but the quarter held fairly firm.
How does a TV sales executive win your budget?
They need to continue to think like a marketer first, and a salesperson second. They've need to continue to think about each client as if they're the chief marketing officer. Come to the agency with ways for the client to break through, and spend less time making a flow chart look pretty. They need to think about return on investment in the only form that matters: How does ad spend turn into marketing success?
Is pricing coming down, and are media salespeople discounting yet?
The clients are smelling blood. It's not wrong to be thinking that; it's to what degree will the market soften. In a down market, it's how low is down?
We have to find where the market is. The expectations are that things will be less expensive, but not everywhere.
Are there any winners?
Cable as a price alternative continues to be attractive. It is efficient based on network alternatives and there's a price that's attractive. Cable is in the best shape.