Ratings Shortfall=Price Increases from Networks

With Nielsen's new commercial-ratings data being used in upfront negotiations, media buyers and networks are further apart than ever, Ad Age reports today. The commercial-rating numbers are obviously lower than the program ratings, because some viewers tend to tune out during ads. To make up for that shortfall, some broadcast networks are asking for double digit price increases (in the 11%-12% range) in the cost of reaching 1,000 viewers (or CPMs). That's a sizable increase from last year, when they were able to get single-digit increases. But the buyers are holding back, offering only low single-digit increases again.

It may seem counterintuitive that networks would ask for more money for less viewers, but in our increasingly fractured and personalized times, TV continues to be draw the largest audiences to a single media format. Also adding to the slow upfront rollout; the fact that some buyers are disappointed with the broadcast network's new programs and don't want to pay even more money in a time when viewers are increasingly time shifting programming and avoiding ads all together. And lastly, the online world continues to appeal to both audiences and advertisers. With that in mind, the New York Times takes a look at an old advertising plan that's finding new purchase: the sponsorship model.

Today, branded entertainment is making a comeback as marketers and networks seek to cope with the increasing ability of viewers to zip through or zap traditional commercials. If a pitch is incorporated into a program that people want to watch, the thinking goes, there is a far higher chance it will be noticed.