As the number of digital TV channels continues to grow, the media landscape it becoming further fragmented and broadcasters are having to be more creative to ensure big brands don’t turn their backs and advertising budgets on television.
There are now over 300 channels that fracture television and advertisers are increasingly looking to broadcasters to produce alternatives to the 30 second commercial spot or they may walk away from television, which has traditionally been seen as the most powerful advertising tool.
If advertisers follow the lead of giants Heinz, who switched a large proportion of its advertising budget away from television a few years ago, broadcasters will find themselves in a cash-strapped catch-22 position – no revenue coming in, so no money to make programmes.
Speaking at the Media Guardian Edinburgh International Television Festival, Stuart Mison, managing director of Octagon said: “We need to review the way TV is traded – bought and sold. It needs to change.
He added: “There are over 300 channels but the audience is not growing. Advertisers are questioning the efficiency of using TV in its current structure. Broadcasters need to start looking at how they’re funding programmes if advertisers are planning away from TV. If they don’t have a revenue stream, in turn they can’t commission programmes.”
One solution to the problem is advertising funded programmes (AFP), said Mison, in which advertisers plug a short-fall in broadcasters programme making budget, in return for their product(s) being placed along side the programme. The benefit to the advertiser is that not only will they appear as a sponsor on television, they will be mentioned alongside the programme in the press or on the internet at no extra cost.
However, sceptics of AFP say that broadcasters will lose editorial control of the programme as the advertisers see the project as its ‘baby’. However Mison said as long as ground rules are set up first and each party is 100% sure of what the goals are, this should not be a problem.
The increasing number of television channels is not the only challenge that broadcasters have to overcome. Consumers have an increased amount of ‘in-home clutter’ such as; in-home entertainment systems, the internet and digital radio.
Mison said: “Media spend [on television] needs to work a lot harder cause if it doesn’t, advertisers will go elsewhere and look to other forms to sell there brand.
He added: “Advertisers are facing declining viewers. Media inflation is running at three, four, maybe even five times what RPI is. The media pound is having to work a lot harder to match where it was one year ago.”
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