The new media are having an effect on the advertising revenue of major networks, and it’s not something the networks view as “good.” The upfront market, in particular, faces decreased growth, and perhaps even outright decreased ad dollars, in comparison to past years.
Traditionally, advertisers buy 70 to 80 percent of available commercial time well in advance of the fall season. This is known as the “upfront market;” the remaining time is sold during the season in the “scatter market.”
As television shows move to Web sites, iPods, and cellphones, among other forms of “new media,” advertisers seem less willing to spend exorbitant amounts on traditional commercials. Many analysts are remaining silent on the issue, but some feel that the whole market, and particularly struggling networks such as NBC, may be hurt as advertisers consider these new options.
Charlie Rutman, chief executive for North America at MPG in New York, concedes the change. “This upfront will be different because of all the choices,” he said.
Joe Mandese, editor of MediaPost in New York, thinks this upfront could mark a turning point. “There’s a finite supply of time on TV, but multiple platforms create multiple sources for new ads,” he said. “The networks are recognizing that the way people are consuming television is changing, and the money is going to follow that.”
It doesn’t have to necessarily become a competition between new media and the traditional networks, though. Rutman thinks they can peacefully coexist, or even support one another. “I’ve been doing this for 30 years, and the idea of getting up in the morning, coming in and trying to find the new beachfront property’ is exciting. The networks are doing a terrific job in opening up these new avenues to us.”
Whatever happens, network commercials aren’t going away-they may just be sold for a little less money. And it looks like we may soon see more advertisements in the new media.
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Doug is a staff writer for murdok. Visit murdok for the latest eBusiness news.
