Turning the Dial on Cable Advertising

May 15, 2018

By Lauren Babbage

Television may be going static. As the major networks present their new shows at upfronts this week, they are fighting for smaller shares of a shrinking market.

Ad sales on linear television fell 2.2 percent in 2017, according to the ad-buying firm Magna, and it estimates sales will fall at least 2 percent in each of the next four years. Advertisers are wary of old-school television's reach among the consumers they most want to reach.

"I think the name of the game is cross-platform," said David Cohen, the president of Magna. "Obviously, NBCUniversal has lots of different assets they come to the table with, both network and cable and digital."

In an interview Tuesday with Cheddar, Cohen said it is increasingly important for networks to find ways for their advertisers to move with consumers across platforms and from show to show.

Viewers are abandoning traditional TV and taking the value of the ad-sales market with them. Streaming platforms like Netflix, Hulu and YouTube TV are diverting ad dollars from networks like NBC and CBS by providing advertisers with the ability to target specific demographics. Digital platforms give advertisers who once dumped all their money into TV ads the ability to promote content across multiple platforms and capture the mobile-forward consumer.

Cable television lost 3.6 million viewers in 2017, and Magna predicted it could lose another 4 million viewers this year. It also said more than 20 million households will cut the cord by 2020.

The people still watching TV are valuable, for now, but they are quickly becoming less appealing to advertisers ー and shrinking. According to The New York Times, TV shows attracting the highest ad rates are also attracting an older audience, with a median age of 37-60 years old. That's less desirable going forward for brands aiming for the attention of millennials, whose spending power is estimated by Oracle to reach over $3 trillion in 2018.

"We're seeing lot of the networks, broadcast and cable, try to program themselves for the Rokus, the Amazon Fires, the Apple TVs, etc.," said Cohen. "They're going to take their content and they're going to spread it out in lots of different places."

For the full interview, click here.