The president of the spot TV trade group is committed to making spot easier to buy and sees some up signs in this down year–an increase in auto spending and heavier than expected political spending .
Tomorrow, at a New York press conference, the Television Bureau of Advertising is expected to announce that it is leading a broadcasting industry effort to take much of the hassle and cost out of buying and selling national spot TV advertising.
TVB is developing a computerized e-business system for ordering, processing and invoicing spot TV buys—a seamless electronic interface among TV stations, their reps and media agencies.
“We’re now going to build it and they will come,” says TVB President Chris Rohrs.
The effort is born of frustration. For years TVB has been encouraging providers of trafficking and media buying software to develop an e-business system of their own, but has achieved only limited success. Buying spot still involves too much paper, too many people, too much time.
By simplifying the buy, the TVB is hoping that it will go a long way toward stemming the steady erosion of national spot advertising revenue over the years.
In this edited interview with TVNewsCheck Editor Harry A. Jessell, TVB President Chris Rohrs defers further talk about the e-business initiative until tomorrow’s press conference, but provides some insights into the 2007 spot market.
Without spending around the Olympics and major elections, even the most optimistic forecasters believe 2007 sales will be down several percentage points from last year.
But Rohrs believes that the key auto category will grow and agrees the political take will be surprisingly large, although no match for 2006. Now, if he can only convince pharmaceutical advertisers of the benefits of geo-targeted spot advertisingÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦.
How is the first quarter in spot shaping up?
We don’t have any figures yet, but, anecdotally I would say the core business is probably flat to up slightly, core being everything except political and Olympics. If you include that, total spot will probably be down in the low single digits.
Nothing unexpected there.
No. But I think the automotive business is going to be pretty good this year.
That’s what you said in our story about the first quarter earlier this month. So you think auto dollars are going to be greater this year than last?
Yes. I believe so, for spot anyway. I saw the story today [in Advertising Age] that GM had cut ad spending by $600 million last year. Whoever wrote it reported that about half of that came out of the corporate ad budget. That’s not spot TV. What’s interesting is—I just checked—GM in the fourth quarter was down 27% in overall ad spending, but was up 12% in spot.
What are they telling you about their plans for this year?
Nobody tells you anything anymore. They’ll give you as vague an answer as possible. What we’re sort of hearing is flat, but I think that the category will be up because of the competitiveness and because of the truck situation. The importance of that cannot be overstated. Light trucks are about half the market now.
Which baffles me as a suburban New Yorker.
Toyota has really not been much of a player in that. But that’s all over now. Now they’ve built this new full-sized Tundra and they’re going flat out in that segment.
I’ve also read that the auto makers will be introducing 50 new models this year. That should help too, right?
There are a few more new models this year than there typically are and that’s being driven by General Motors and Ford, which have a dire need to upgrade their fleets. You’re seeing important new model developments. For instance, the new CEO of Ford just announced that they were going to restore the Taurus.
By sticking that name plate on the 500 sedan.
It was kind of an odd move to mothball the name Taurus when it had been the No. 1 selling vehicle for years.
Well, you’re suggesting that it’s going to take a lot of advertising to resurrect that brand.
Yes, I do. Personally, I believe that automotive will be solid in spot this year for the reasons we’ve talked about, but also you cannot overstate the continuing importance of geography in car marketing. When we get those figures for 2006, spot TV will have the dominant share, probably pushing toward 30% of total automotive ad spending.
The big news for spot in 2007 has got to be political. Evan Tracey, who tracks political spending, says candidates may spend $750 million this year. Is that possible?
Absolutely. Absolutely. Here’s the deal. First of all, the presidential race is in full flourish already. Even with no changes in the primary schedule, we’re going to have substantial activity in ’07 for ’08. But there’s the very real possibility that California, Texas, Illinois and New Jersey will move their primaries to February. That means that there will likely be full, flat-out competition in ’07 in those primaries, which will be, of course, pivotal, given the electoral votes in those states.
We haven’t had this situation in close to a century, where you have no incumbent from either party and a wide open race for both party’s nomination. You are going to have many players trying to get traction and it’s going to be startlingly early and heavy. Everybody’s going to be well funded.
The bad news is that spending is going to be up against $2 billion plus in 2006. So you’re still down more than a billion. That makes a tough comparison and that’s why this year is going to be almost certainly down.
What’s the good news in the other ad categories?
Telecom will stay strong. It’s really the telephone companies competing with wired cable companies for the bundle package of telephone and Internet and video. I don’t see any noteworthy ups or downs in other categories.
You don’t see any downs like fast foods?
I don’t see any noteworthy declines there.
What are you doing to try to spark some life into some of the flat categories?
One we work very hard on that has huge potential is the DTC [direct to consumer] pharmaceutical category. It’s a huge category and it uses almost no spot TV—less than 5% of its ad spending goes to spot TV.
We have a very compelling argument for geography because, No. 1, the incidents of these various conditions that get advertised—from backache to acid reflux to erectile dysfunction—all have very distinct geographic footprints to them.
Strangely enough, almost every one has a real geography to where the incidences are, so there’s a great story as to why they ought to be paying more attention to the most productive markets. It’s very much like the car business.
But you’ve been telling this story for a while.
We’re just not getting traction with it. We just can’t get any change to happen. The marketing of these drugs is just static. They all do the same thing. They do network TV and they do magazines.
It’s been a frustration for you.
While we’re frustrated that we haven’t had anybody act on it, we’re keeping at that because the money is so big.
We’re trying to recast the story, freshen the data and keep at it because it’s a very compelling story. I know that anybody who would move some of their weight into high-response areas would get real improvement in the performance of their advertising plan.
There’s another interesting angle to this. There’s a fair amount of political pressure brought to bear on this advertising as to whether it’s a good thing for society or whether it simply drives up prices. We make the case that if you geo-target this advertising to markets where the incidences of the conditions is highest then you’re not really advertising to create demand. That’s more responsible. You’re directing your message to areas where the conditions are and not just stirring up interest in it.
So there’s a public policy angle you can work.
Exactly. Now we’re not saying to any of these advertisers, eliminate network and national magazines. We’re just saying you get great plan improvement if you put some weight against the high-response markets.
You just came back from Chicago and the Retail Advertiser Conference. What’s the story in retail?
Well, that was a little bit of a different conference this year. It wasn’t so much on issues. It was on stories of companies and they were kind of disparate. Frankly, it wasn’t a very good conference. The biggest thing in retail for us is, and it’s a continuing problem, that all of the big retailers are going to full national distribution.
Because of consolidation.
You really don’t have much regional or local retail left in the country anymore and that’s a terrible blow to newspapers, but also a blow to broadcast. Newspapers, of course, are heavily dependent on that.
Do you see are there any emerging categories that give you hope like political a decade ago.
Political isn’t fully emerged yet. Not only are you going to have all of this money around races and ballot issues, but you’re also going to see a continuing growth of money around off-ballot issues, societal issues. Not only that, but you’re going to have what are considered today commercial interests played out more and more through media advertising.
I’m not following you. Do you mean advocacy advertising like they have in Washington to affect legislation?
No. It’s where you’re trying to affect public opinion. So, if you have a business dispute in a town as to whether a major development ought to get built, you might see that played out over media. There will be advertising bought.
So even though it may be a council or zoning board vote, it might start showing up on TV.
Yes. More and more, you’re seeing what are considered just to be community issues, commercial issues, played out through advertising.
What’s the spring conference in New York about this year?
It’s going to be focused again on serving the customer and I guess the high points will be multiplatform, e-business and automotive.
Are you expecting a good crowd?
I think it will be about the same as last year because it’s always harder for us in the odd numbered years when business isn’t as good. Everybody works their expense budget tighter.