Ratings down, ad rates up

I know it doesn't make much sense, but then again, it's television. And it speaks volumes about the inability of advertisers to adjust to a multi-platform world. TV ratings have been steadily eroding since last summer, months before the writers strike. That puts the squeeze on networks, which guarantee that shows will generate a minimum numbers of viewers. Anything below that guarantee requires the network to "make good" on the difference - either with cash back or another placement on the schedule. Advertisers don't need the cash - they need eyeballs. All of which has kept advertising demand high, despite the less desirable network offerings. If anything, demand is even higher because there are fewer shows to buy into (reality programming doesn't work for certain advertisers). Tim Spengler, president of Initiative USA, tells MediaWeek: “We are not taking cash back for our clients,” he said. “We’re trying to get as many ratings points as we can.”

While February has not brought traditional sweeps results due to the three-month-old Writers Guild of America strike, the nets have managed to put on enough new shows to pacify most advertisers. “What is missing are the bedrock broadcast network shows, like first-run episodes of Grey’s Anatomy, CSI, 30 Rock,” said Harry Keeshan, executive vp, national broadcast at PHD. “But the networks are by no means throwing in the towel.”

With the strike just about over, there’s endless speculation on how the media landscape might change, if at all. Some say it will be business as usual; others believe the industry is in for a drastic overhaul, including a cutback in the annual upfront market where advertisers buy time for the fall season. From TV Week:

The strike has helped focus advertiser attention on the broadcast networks’ shrinking prime-time ratings and forced them to find alternative ways to get their marketing messages to consumers. Those ratings are likely to continue to suffer until the networks can put new episodes of their top shows on the air again. “We started in a situation where we’re living in a world of decreased ratings and increased costs,” said Louis Roloff, VP and director of video investment and activation at MediaVest. “The writers strike just drove further potential ratings erosion, and I think that accelerated discussion about TV budgets and questions about should TV dollars be re-expressed in other media, and the damage has been done.”