Guest Commentary: Television in 2009: Will the Recession Save TV From Itself?

Jan 18, 2009  •  Post A Comment

The year 2009 will put stress on the TV industry because the TV business has grown disingenuous.
Hardware and software industries revolutionize the ways we use our TV set while advertisers cling to the notion that viewing behavior isn’t changing much. TV content is increasingly cluttered while TV carriers provide clutter avoidance software. Advertisers demand big ideas that integrate the product into the program but tolerate commercials that lack a big idea.
We can’t blame technology for changing commercial-viewing behavior until we confront our own.
Television has evolved its business model since the birth of cable. TV content was funded entirely by advertisers in the 1970s; now, the National Cable & Telecommunications Association reports cable systems’ subscription revenue in 2007 was about $75 billion while Adverting Age reports the 100 leading national advertisers spent about $30 billion on TV advertising.
Whatever data you choose, the sea-change is evident. The content providers need to sustain ad revenue while the content carriers need to super-serve the subscriber.
One might expect that these co-dependent industries would operate in a complementary fashion with the goal of optimizing both revenue streams. But the reality is that they operate like competitors battling for their share of the subscription revenue pie. Subscriber revenue is now the priority.
Constituencies that depend on TV commercial revenue continue to point to Nielsen data indicating a healthy amount of time still is spent watching TV. Nobody disputes this. It’s time spent watching TV commercials that is in trouble.
During the last boom, the focus of TV ad investment shifted toward ideas that happened outside the ads. For example, there was more industry attention paid to the integration of AT&T and Coca-Cola into “American Idol” than to the ads that ran during the show. The emphasis on “creativity” being about something other than the advertising correlates to the unbundling of ad agencies into distinct media and creative services. Advertising agency dis-integration made it harder to keep the focus of media value concentrated on the commercial itself.
Despite these trends, let’s remember that the TV commercial is still a powerful tactic. For decades, the cost of TV advertising went up faster than the rate of inflation, but the demand for inventory did not fall, because the value of TV commercials was greater than their price. Today, how many people who buy and sell TV ads have any idea if the value is aligned with the price?
From the marketing side, the experts on digitally empowered consumer behavior and the experts on TV advertising almost never sit down to talk about strategy. Clients get what they pay for. They ask for integrated communications strategies, but they pay for dis-integrated specialists.
Let’s cut to the chase about why consumers avoid TV commercials. TiVo is not the problem. The primary reason consumers are avoiding TV ads is clutter. The second reason is irrelevant commercials.
Consumers still watch commercials. They ignore irrelevant messages and they avoid commercials altogether because the pods are so long, but they appreciate relevant commercials and will engage with the marketer when a smart commercial asks them to do so.
Let’s hope this recession will see a shift back toward the importance of the TV commercial. TV commercials are scalable and repeatable opportunities to reach mass audiences with effective messages. In fact, TV commercials can be more valuable than ever because they drive online engagement efficiently.
Content carriers and providers need to operate like the co-dependent businesses they are. Strategies to reduce commercial avoidance need to focus on the real causes. Targeting technologies need to improve the relevance of TV ads. Commercials need to contain interesting messages. The consumer is not the challenge; we are the challenge.
Perhaps a recession is what we need to get focused on the win/ win solutions right in front of us.
Mark McLaughlin is president of McLaughlin Strategy, a digital consulting firm for media companies, marketers and ad agencies.


  1. Beautifully stated! The industry is ready to grow again but only after we face the truth and take responsibility for creating better consumer and customer experiences. The top-down, interruptive advertising model is incomplete and growing more inefficient every year. We have all the tools we need….what’s holding us back is us.

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