Cost inflation on television – the advertiser’s perennial nightmare. There has been a great deal of discussion in recent weeks about the contribution of the station average price (SAP) system of trading to the inflation debate.
I said at the ISBA Policy Conference that many advertisers had been silent conspirators in this issue, not asking for a price, simply a discount. Now let’s turn to audiences and programming.
It is fashionable to criticise broadcasters for doing just that – broadcasting. Of course, we all want commercial television to appeal to niche audiences and particularly to keep an eye on younger viewers, but I think we need to recognise the economics of broadcasting and be realistic about the ability of large terrestrial stations to respond to every advertiser’s particular requirement.
Of course, there are things we should continue to lobby for – commitment to quality drama, innovation in late-night shows, competitiveness in terms of sport, and so on.
But to expect, for example, ITV to compete long term for children’s viewing is counter-productive. In the US, the big four networks have been trounced by Nickelodeon but advertisers looking for child ratings arguably have a more effective route to their audience than they have ever had before.
The US TV analogy has value but it is not as instructive in this area as a look at another analogous market: magazines.
There are over 2,400 titles listed in BRAD. No single title has more than five per cent of the gross circulation. If the TV market went this way it would be a buyer’s nightmare. It won’t.
The reason is that magazines bunch mainly into fairly large and homogeneous sectors (or genres) with convergence of taste similar to that found in TV. For instance, 40 per cent of gross circulation is accounted for by women’s titles.
Commercial logic dictates that you will get more and more launches within a genre until the profitability is bid down to a point where it is more profitable to go for a bigger share of a smaller genre.
A few years ago, the women’s weekly market had only five titles and most pundits thought it was saturated. Today, there are 17 and IPC is flourishing in a sector stimulated by German companies such as Gruner & Jahr.
This has interesting implications for TV companies. ITV and Channel 4 will have a different genre composition to Nickelodeon or Sky Sports. We will have to accept a new order where they cease to be all things to all people.
This is why Channel 5 should resist the temptation of being positioned as too much of a niche channel.
Our research would suggest there is still plenty of interest within the mass market for general entertainment programming.
So for television planners and buyers the best route forward is to spend time forecasting channel shares for programming “genres”, not channels or individual programmes.
Having established the best genres for a particular campaign, recognising any relevant qualitative factors, such as attention or environment, the buying job is relatively straightforward – rather like it is for magazines.