When talking about advertising, television remains a powerful medium. However, the TV advertising industry is facing significant challenges and changes. Recently, a TV purchasing director from the Media Direction Group holding shared valuable insights about the current state of TV advertising. Let’s dive into these key points and their implications for advertisers, agencies, and TV channels.
The Price Conundrum
One of the burning questions in the industry is: When will TV advertising prices stop increasing? The answer, according to our expert, is straightforward yet complex. Prices will stabilize when demand stops growing. However, predicting demand has become increasingly difficult in today’s volatile market.
Remember the ominous forecasts of a 70% market drop? In reality, the decline was a mere 2%. This discrepancy highlights the unpredictability of the current landscape. As a result, all parties involved – sellers, advertisers, and agencies – need to adjust their strategies monthly to keep up with the rapidly changing environment.
The Inventory Squeeze
Another pressing issue is the shortage of advertising inventory. While the scarcity is significant, it’s not absolute. Most channels still have enough inventory to satisfy the needs of various media plans. However, an imbalance has emerged
- Long-term contracted inventory
- Free balance inventory sold at significantly higher prices
This imbalance creates a barrier for new and smaller advertisers, who find it challenging to compete with top advertisers on equal terms. This situation conflicts with Russian government guidelines aimed at fostering fair competition.
Time for a Terminology Overhaul?
Our expert raises an interesting point about the terminology used in TV advertising. The industry still relies heavily on terms like GRP (Gross Rating Points), which many young professionals under 30 struggle to explain.
In contrast, digital advertising metrics are more intuitive. Concepts like “campaign reach of 50 million people” or “buying 20 thousand contacts with a frequency of ten impressions per user” are easily understood. But what does “a thousand ratings” really mean in practical terms?
This outdated terminology sets television apart from other media and poses a significant obstacle to integrating TV advertising with the digital environment. It’s a call to action for the industry to modernize its language and metrics to align with the digital age.
Implications for the Future
These insights paint a picture of an industry in flux. Here are some key takeaways:
- Flexibility is crucial: Advertisers and agencies need to be prepared to adjust their strategies frequently.
- Bridging the gap: There’s a need to create more opportunities for smaller advertisers to access TV advertising.
- Modernization is key: The industry should consider adopting more universally understood metrics to facilitate integration with digital advertising.
- Adaptability will win: Those who can quickly adapt to changing market conditions and embrace new ways of thinking about TV advertising will likely come out on top.
The TV advertising landscape is evolving rapidly. While challenges exist, they also present opportunities for innovation and growth. By addressing issues like pricing volatility, inventory shortages, and outdated terminology, the industry can pave the way for a more inclusive, flexible, and integrated future of TV advertising.
As we move forward, it will be crucial for all stakeholders – advertisers, agencies, and TV channels – to collaborate and adapt. Only then can we ensure that TV advertising continues to be a valuable and effective medium in our increasingly digital world.
