Cablers don’t get respect from advertisers

Despite rising ratings, ad revs remain low

Cable TV is growing faster than a ballplayer hooked on steroids.

As it bulks up in the Nielsen ratings, cable TV keeps pulling more and more viewers from the broadcast networks — especially in areas like news, sports, kids programming and fresh theatrical movies.

But while Nielsen keeps casting a benign glow over cable, Madison Avenue still doesn’t get it, according to Jack Wakshlag, chief research officer of Turner Broadcasting.

Ad-supported cable gobbled up 52% of the audience share in primetime season to date but pocketed only 39% of the ad revenue. (For the same period, broadcast TV reaped 69% of the ad dollars while attracting only a 46% share.)

“That’s completely out of balance,” says Wakshlag. “Advertisers are just not acting rationally.”

But, in many cases, cable networks are beating their heads against a wall of ad-buyer inertia. It’s so much easier for a media buyer to purchase time on only six broadcast networks than to get bogged down in labor-intensive negotiations with the 60 cable networks that Nielsen reports on every day.

“Broadcast TV is still the dominant medium for advertisers that want immediate mass reach for their products,” says Bob Flood, head of national electronic media for Optimedia Intl.

“A movie company or a company with a new retail product may be looking for a big audience in a tight period of time,” making the six broadcast networks the more logical choice than dozens of cable networks, some of which “might not be appropriate for the message,” as Flood puts it.

Aaron Cohen, executive VP and director of national broadcast for Horizon Media, says cable is at a disadvantage because “the classic supply/demand model holds sway.”

Because there are 60 Nielsen-client networks, plus a number of other ad-supported digital nets that don’t subscribe to Nielsen, “cable has too much supply,” Cohen says.

Media buyers can play cable networks against each other, he says, and drive the prices down.

Cohen says advertisers won’t overpay for cable if they don’t have to.

But “Madison Avenue is not turning its back on cable TV,” says John Rash, senior VP of Campbell Mithun Esty.

“The cable marketplace breaks records in advertising revenues every year,” Rash says.

The main problem for Wakshlag is that cable’s annual gains are not moving fast enough to make him happy.

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