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TV advertising dollar shrinks

Seven was the only commercial FTA network to boost its revenue share last year, but the outlook for networks in 2009 looks grim.

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fuelFigures released yesterday show the declining advertising dollar spent in television in 2008, much of it before the impact of the global financial crisis.

Bolstered by the Olympics, Seven was the only network to increase its revenues, with $1.15 billion in ads last year, slightly up from the $1.14 billion it booked in 2007.

Nine’s revenues fall 4 per cent to $892 million for the year, while TEN posted a 6.8 per cent fall in ad sales to $808 million.

The amount spent on TV advertising in capital cities shrank 5.3 per cent in the second half, an unprecedented decline in a year that should have been boosted by the Olympics.

“The market coming down quite that much was a surprise to us all,” one TV executive told the Sydney Morning Herald.

And there is no sight of relief yet. “The first quarter will be a tough quarter,” Seven’s chief sales and digital officer, James Warburton, said.

Clients are booking only weeks ahead, putting pressure on the ad rates networks can charge.

Source: smh.com.au

9 Responses

  1. “’The market coming down quite that much was a surprise to us all,’” one TV executive told the Sydney Morning Herald.”

    Yeah well, we all know these folks have their heads stuck up their, erm buried in the sand, for yonks they didn’t believe the viewer was bit torrenting because of the flawed figures OzTam produces.

    There are other reason the ad dollar is shrinking, people are by-passing complainig to the networks (it does absolutely no good) and going straight to the source of the advertising dollar

  2. good point Russell, I suppose there is a place for ads, however I don’t agree with them being the same length as FTA, simply because you are paying to watch foxtel channels, while you aren’t paying for FTA (except for your time spent watching the ads).

    With a newspaper, you pay only a tiny portion of what it’s probably worht, and ads pay the rest. However it’s not the same with PayTV, you’re paying a larger portion and still getting a large portion of ads.

    Still, im switching to either taping or watching dvds. I haven’t watched one of my favourite shows live on tv in ages, there’s no way i could sit through those excessive amounts of ads in lost, pb an 24.

  3. Paul,

    I’m always confused by people who ask why does PayTV have ads when you are already paying for it. You also pay for newspapers and magazines. Yet they have ads. You pay for you DVDs and cinema tickets – yet they have ads before the movie. You pay for your internet service – yet there are ads everywhere.
    It’s no different here with pay TV.

    Also without commercials shows on PayTV would start at odd times like 8.10 and 9.15 – and that would put the cable channels at a huge disadvantage in attracting viewers.

    Also, the governmnet regulates how many minutes of ads can be on per hour. I suspect it hasn’t changed in years. It’s regulated.

  4. If i were an advertiser (particularly a large one), i would demand the networks do some research on customer relations – that’s right, viewers are customers too. This lack of understanding of the basics of audiences is tantamount to corporate suicide.

  5. Suggest advertisers too are getting sick of FTA chopping and changing schedules all the time. We note that 9 and 10 are going down in ad revenue, the same 2 networks who are worst offenders of erratic programming.

    If I was a large advertiser I would be very concerned about the instability of programming and lack of respect to the viewers – the very people being advertised to.

  6. That gives me an idea Paull, i’ll record some shows on FTA this year and compare them with the US equivalent in terms of length. I did a semi-experiment with How I Met Your Mother with the tv and downloaded file playing at the same time early last year, and the broadcast one was faster – ie. little bits cut out of every shot, undoubtedly to make room for more ads.

  7. Firstly, it’s still quite ironic that Pay tv has ads. Mainly because of the keyword in Pay tv, Pay. I’ve never understood why you would fork out $40 or $50 per month to watch more ads.

    Now onto the main issue. It’s also ironic that advertising revenue for FTA networks is lowering. Mainly because TV networks are going ad-ccrazy now days. We’re seeing 4 minute ads during prime time television, as well as in-show, and intrusive, advertisements about shows that are coming up.

    In the last 2 years ads have gone from 10 minutes per half hour to 12 minutes (hence overtime running shows), which sacrifices the length of long running tv shows, such as lost, which is now approximately 2 minutes less per ep now.

  9. Again, I think we are missing the whole story here.

    It is very likely that “TV Advertising dollars” did not shrink. But “Free TV Advertising dollars” did.

    Pay TV has been increasing it’s advertising revenue every year for years – to match their increasing market share.

    So, TV advertising dollars aren’t shrinking. They are shifting – from Free to Pay.

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