Advertisers Groups at NAB Super-Session Indicate Interest in New Business Model

Apr 19, 2005  •  Post A Comment

Advertisers are finally ready to make changes to their fundamental business model, given the fragmentation wrought in the marketplace over the past few years. That was the message of a super-session at the National Association of Broadcasters’ Convention April 18 in Las Vegas. The session featured the heads of the major advertising trade associations, including the Television Bureau of Advertising, the Association of National Advertisers and the American Association of Advertising Agencies.

“We have recognized the future is upon us and will make the necessary investment to improve the long term marketplace,” said Bob Liodice, president of the ANA. “Advertisers have recognized the fragmented marketplace is an opportunity. That’s not to say we are running away from traditional media. They are just employing a broader [approach]. Look at the strength of new media. The future is now.”

Mr. Liodice pointed out that several national advertisers such as American Express, Procter & Gamble and Coca Cola have moved money out of TV and into new media. Pepsi, for instance, did not use any TV when it launched Pepsi One. “There is a great degree of frustration and anger with the rising rate of CPMs at broadcast, and this is an opportunity to diversify away from their traditional broadcast mix.” However, TV will be better positioned to keep its dollars if addressable advertising becomes more widespread.

“If the medium becomes more accountable and more addressable and allows advertisers the ability to target ads to the households that make sense, then advertisers continue to be a source of funding to keep the network model where it is,” he added.

Advertisers can target not just demographically or psychographically but geographically, said Chris Rohrs, president of the Television Bureau of Advertising. “There are all sorts of enhancements for local broadcasters-time of day, local weather-to make the message more tailored and targeted.”