TV ad lift puts the squeeze on media buyers
The resurgence in demand for TV advertising has seen the tables turned on media agencies who used last year’s tough media environment to win cheaper airtime from the networks.
Those agencies that buy ads chiefly through trading rather than making longer term deals commiting them to a level of spend with specific channels are now facing difficulties getting clients onto key shows.
Seven has taken a particularly tough line. The last few days has seen some smaller agencies presented with a significantly higher rate card by Seven. Mumbrella understands that Ikon – whose clients include CommBank and Vodafone – is among the agencies affected.
A source told Mumbrella: “You’re going to see some clients being squeezed off the network. They’re not going to get onto Packed To The Rafters.”
another big win for the big media buying agencies… and of course the client is the one that always loses out…
You will always get on air… provided you pay what the Networks want for a Spot. Avails will always magically appear where there were none.
Long terms deals and negotiated rates mean nothing. If your at a high discount and the Network doesnt want you in something they just NA it. What the current market and increased demand is doing is just highlighting whats been happening for a very long time.
The moral to the story, the cheapest rate position is not the pace to be in a sellers market!
As simple as supply and demand!..
And the cheapest rate position is most often down to client size, not necessarily the size of the agency.
So Ronnie, not sure this really is as simple as ‘another big win for the big media buying agencies’.
Some big agencies have smaller clients who will now capitalise on the higher yield within their negotiated ratecards.
Minus the snipe at Ikon which is irrelevant, I’d like to thank the author for their insight and understanding in respect of trading. Who would have thought that media owners would force prices up with demand.
I’m pretty certain that this doesn’t just apply to TV, but I could be wrong.
And FYI shows like Packed to the Rafters sell out regardless of a weak or strong market, because “good inventory always sales!’.
The reality is any agency worth a dollar would have seen the market picking up, known that prices would follow and prepared themselves accordingly. It’s called media buying and they’ve been doing it for years!
With a close ratings year….Anyone know the figures (shares)? the Revenue Management teams will be working overtime to lift every additional cent possible. In high demand and close ratings times, it will be the best RMS team that delivers the greatest revenue share. Who will win??? Any bets?
Think the networks have an awful lot to answer for here.
Advertiser who stuck by or even grew commitment are being penalized across the board.
Loyalty cuts both ways. And as soon as the networks realize the current increase in demand is a transient blip behind the change in retail consumer sentiment and a second wave of advertising reductions – you read it here first – there are going to be some pretty pretty ugly outcomes.
This will come back to haunt the networks.
Why single out Ikon?
demand goes down, so does price. Demand goes up, so does price. Does not matter if you’re selling airtime to agencies or iron ore to China, it happens in every part of a functioning market place. The networks collectively dropped their strides during the GFC to shore up volume and hence survive tough times (every business did the same). Now that demand is back the networks have every right to increase their rates – any agency that thought they’d stay where they were (during what was being tipped as Great Depression 2.0) after a recovery must have been kidding themselves.
And Mike, clients don’t spend on TV out of an alltruistic sense, feeling the need to support the networks that provide them and their families with such fine entertainment. They do it because if they don’t their competitiors will and soon enought will be eating their dinner.
Hi LB,
Ikon is the only trading-based agency I’m certain was on the receiving end of the new ratecard. There are others that were too, but I’m not confident enough of my facts to name them.
Cheers,
Tim – Mumbrella
TV is a fixed inventory, therefore its driven by demand and supply of the market. They have lost over half their audiences over the last decade yet prices have risen by over 400%.
Consumer no longer see media in hierarchical terms such as TV is number one. They will take content from where ever, when ever they want to – so do not put all your eggs in one basket with TV move outside the home – its certainly cheaper and far more effective for your clients media spends.