Poltrack sees TV advertising up in '07

CBS chief research officer David Poltrack sees TV advertising picking up next year after a soft 2006 in which advertisers raided their network ad budgets to invest in new media.

And he exhorted Nielsen to somehow start measuring DVR usage — a discussion that’s been ongoing between networks and the ratings agency. “It has to happen. We cannot afford to give up,” he told investors at the UBS media conference Monday.

His stats show network TV advertising up 3%, in ’06 with the underlying increase — taking into account the Olympics — at a mere 1%. That’s less than he’d anticipated a year ago in his annual presentation.

He sees a brighter 2007 with enhanced spending as companies rake in profits, the scatter market grows stronger and, possibly, a Nielsen measurements shift to commercial viewing, including on DVRs.

He called ’07 “a transitional year in network TV” and sees ad revenue up 3% — with an underlying gain of 5%.

The current strong scatter market, he predicted, should make for “a more seller-friendly upfront” next time around, and 2008 is another election year. He also predicted a blitz of advertising by electronics makers and others ahead of the upcoming conversion to digital television in 2009.

He also sees rising revenue from Internet streaming of broadcast shows.

But the bee in his bonnet is DVR — digital video recorders that let people record shows and watch them when they want, fast-forwarding through the commercials, if they want.

“The networks are not getting paid for 7% of their audience. Some of the audience is watching some of the ads … It’s not acceptable,” he said. He said that 40%-50% of commercials are viewed normally during playback.

Given that, and the fact that DVR users watch more TV overall, he thinks the networks would benefit from a new system measuring commercial viewing on DVRs. Cable would suffer, he predicted, since viewers record more networks shows than cable shows,

But he said the issue is urgent because DVR penetration could surge in the next year or so to 20-25% of TV households.

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