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Fox Ad Sales Gets Second Opinion

Feb 27, 2006  •  Post A Comment

Rumors of the TV spot’s demise have been greatly exaggerated, according to Fox.

Stung by research that suggests TV commercials no longer have enough horsepower to sell automobiles, Fox advertising sales executives are pushing new research that supports the network’s claim that its spots still drive buyers to dealerships.

In presentations to advertising clients that began this month, Fox is pointing to recent research by KMR/Pointlogic Compose that shows television ads score highest among consumers in generating initial awareness of automotive brands, influencing brand trust and creating purchase intent, beating out other media, including Web advertising.

The Fox presentations were designed to counter a Polk Center for Automotive Studies report released last month that said traditional mass media had been “rendered nearly obsolete among first-time vehicle buyers.” The report said 35 percent of first-time buyers called the Internet their most important information tool. Only 8.2 percent cited television; 4.4 percent cited magazines, 3.6 percent cited newspapers and 1.1 percent said radio.

While one of the advertising industry’s key concerns lately has been the effectiveness of television advertising, “that Polk study was sort of the one that broke the back there, where you’ve got people saying 30-seconds are dead, television and traditional media don’t work, businesses were doing it all on the Internet,” said Jon Nesvig, president of sales for Fox Broadcasting. “That’s the overstatement that exists, but everybody is looking for hard numbers or something other than just talk because of the focus on return on investment and verifiable impact of their marketing efforts.”

The Pointlogic research “shows that for virtually all of these categories, that television is a big driver of things that make them purchase products,” Mr. Nesvig said. Much of the growth in Internet advertising is coming from search. “Certainly search has got a real nice appeal for return on investment, but it’s how do you get them to that point where they’re going to go searching, and television is still the big gorilla for that.”

Mr. Nesvig said the research will be a part of presentations the network will do as it prepares for the upfront. “I think our customers know that, but we want to get it out there wider that television is still the most important part of the media plan,” he said.

The nation’s largest auto marketer, General Motors, still regards television as a key advertising medium. “From an awareness point of view, I think most advertisers are big believers in the power of television and I don’t think that has changed,” said Mike Rosen, chief investment officer of GM Planworks.

But Mr. Rosen said traditional TV spots are no longer enough and is combining television advertising with branded entertainment and the Internet to make it work harder. “By taking traditional media and connecting it to digital extensions, we can take that initial investment in awareness and start to move these folks down the spectrum toward consideration and purchase and as close as humanly possible to the actual transaction where they’ll show up at the dealer ready to buy,” he said.

In the Pointlogic research, consumers were asked which factors drive them to buy a product. They were later asked about the strength of each medium influencing those factors, said Audrey Steele, senior VP of sales research and marketing for Fox Broadcasting.

When considering auto brands, 52 percent of the respondents said their awareness came from TV, compared with 19 percent from Web search and 11 percent from Web advertising. A total of 31 percent said TV generated a perception of trust, compared with 22 percent for search and 5 percent for the Web. For intent to purchase, TV was cited by 23 percent, compared with 9 percent for search and 3 percent for the Web. TV and search were tied at 22 percent as a source of information about brands. Web advertising was cited by just 6 percent of respondents in that category.

Pointlogic is an independent research company. Along with Fox, many clients and some media buyers subscribe to its surveys, Ms. Steele said.

“Although we chose to stress the automotive category just because there is so much heat on the strength of the Internet versus television, we plan to roll out stories about other categories that are important to us because the stories are just as strong,” she said.

While there is much talk about ad dollars shifting from TV to the Internet, Mr. Nesvig maintains that TV dollars are about flat and that much of the money going into Internet is going into search, and that money is coming from Yellow Pages and newspapers.

“The most important thing is to keep that money in the [TV] arena, and then we feel very capable of getting more than our fair share of it,” he said.

Despite the gloom and doom about TV spending, Mr. Nesvig said Fox is having a strong year. With the performance of “American Idol,” “House” and “24”-especially competing against the Olympics-the network has had extra spots to sell in the scatter market.

“You always hold back for audience deficiency units, and when you don’t need them [as make-goods] it gives you more inventory to sell. And that inventory ideally becomes very valuable, so that’s what’s working for us now,” he said. “We have [time in] ‘Idol’ that we held back in that make-good inventory that we now feel comfortable selling. So we have an opportunity for advertisers who maybe aren’t getting the jolt they expected out of the Olympics; they can get a high-powered supercharge out of ‘American Idol.'”

At this point in the first quarter, Fox is 50 percent to 60 percent ahead of the scatter revenue it generated during the entire first quarter of last year. “The scatter market has been stronger than I’ve seen it in a long time,” Mr. Nesvig said. “It’s certainly a function of ratings, but it’s also a function of a market that is stronger than people are talking about.”