Marketers to Rethink TV Ad Buying Plans

Back in the day, network TV was the king of the ad market. But, the numbers started to shift in 2011 when cable TV surged ahead of  broadcast TVviewerTV. Industry analysts believe that ad buyers may pull back on network TV again this year, especially during the upfront season.

Last year, network TV pulled in about $17.5 billion in ad money while the cable TV operators billed closer to $20 billion. This year, some experts believe the gap will be even wider with network operators seeing a drop in revenue, perhaps to $14 billion. On the other hand, cable TV is expected to generate more than $20 billion for 2013.

Declining audience is to blame for the network woes. The drop in the prime-​time audience through this March for networks, for 18–49 year old viewers, looks something like this:

  • CBS ‑3%
  • ABC ‑8%
  • NBC ‑7%
  • FOX – 23%

These smaller audiences mean that networks will have a tougher time commanding high up front commitments from major marketers when they all meet later this spring to discuss new program offerings and rates. Broadcast TV has always been about reach. With audiences shrinking, analysts believe that major marketers may bid lower than they did last year during upfront. They'll run the risk that purchasing on the scatter marker later in the season, at higher rates, will allow them to reach desirable demographics.  They may also continue to explore other media formats. Cable TV could be a big beneficiary of the changes in the market. Pricing for cable TV is often less expensive. In addition, marketers may also shift some of their budgets to online where consumers are spending an increasing amount of their time.

To learn more about Heavy TV Viewers, check out the Audience Interests & Intent Report available at the Research Store on ad​-ology​.com.

[Sources: Vranica, Suzanne and Launder, William. Signals Weak for TV-​Ad Market. Onlinewsj​.com. 24 Mar. 2013. Web. 2 Apr. 2013; Poggi, Jeanine. TV Upfront Calendar. adage​.com. 28 Mar. 2013. Web. 2 Apr. 2013] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.