1. Sitting room only – “Tent pole” program audiences continue to decline as FTA television viewers eschew linear television

FTA television and associated stakeholders, including the trade media, focus press releases on 000’s of viewers achieved by key properties. What these figures disguise is how few of us are really watching. For example, the Celebrity MasterChef final attracted just 700,000 metropolitan viewers.

Sounds big? This figure represents just 3.9% of television viewers. Even amongst a more focused target of 25-39 year viewers, the TARP achievement figure is just 3.2% (135,000).

The Big Brother VIP final attracted an average of 298,000 viewers, or 1.8% of total viewers. For 18-39 year, this is an average TARP of just 1.0% (57,000).

On November 23, the Seven News, consistently a top performer, achieved circa 950,000 viewers, and this translates to an all-people TARP of 5.5%. Measured against a more advertiser-friendly target of people 25-54 years, the viewership of 209,000 against this demographic represents an average TARP of just 2.8%.

There is speculation amongst some big media buyers that 2022 could “see another five to 10 per cent fall in broadcast audiences.”

Key Implication: Those marketers that are over-reliant on linear television audiences will need to reassess how they can cost-effectively build campaign reach in 2022.

2. Every action has an equal and opposite reaction – Television advertising costs will rise as audiences decline

Closely related to the above is the paradox that, as audiences decline, demand and thereforecosts, will increase.

As audiences decline, media buyers need to buy more spots to achieve campaign reach/TARP goals, thus creating an increase in demand and thereby increasing cost for a medium whose performance is in decline.

Add to this that as audiences decline the networks provide make goods to achieve audience and/or cost per thousand guarantees. This puts further pressure on available airtime.

Key Implication: Marketers need to formalize strategies to negate the impact of higher demand. In a seller’s market, the greatest opportunities for a marketer to maximise efficiencies is to ensure they provide their media agencies with an extended booking lead time. Optimum is 13 weeks, which may may seem a dream, but it will generate efficiencies that eclipse those available to the short-term buyer.

3. There’s no interest like self-interest – Should advertisers have as much faith in media agency group deals (i.e., annually negotiated rate agreements with major media suppliers) as has historically been the case?

While agency group deals purport to provide “best in market rate and discount concessions” we question whether this is proving to be fact in the current seller’s market.

We have observed television networks heavily loading programs bought at short notice. It is simple economics. The value of a commodity increases as supply diminishes.

However, if an advertiser has a rate agreement with a network, shouldn’t that be honored if the time is available?

It seems that the some of the big buyers are sympathetic to the networks’ revenue chase. Which begs the question, what is the strength of an agency agreement?

Lately it seems that agency group deals appear to be of more value to the media supplier and media agency group than their individual clients. Agency groups deals enable sellers and buyers to significantly reduce transactional head hours. Further, we suspect that agency group deals deliver advantages for the group that do not necessarily flow on to clients.

The shift to a seller’s market indicates that agency group deals are setting a base rate, not a ceiling, which is contrary to their original objective!

Key Implication: Clients need to scrutinize the media buying recommendations of their agencies and have these regularly reviewed by independent third parties to ensure delivery of competitive rate arrangements.

4. One stop shop – Growth or demise?

Exacerbated by Covid-19, agencies more than ever are looking to identify opportunities to generate additional revenue.

Enth Degree has observed that there has been an increased emphasis from some agency groups to position themselves as multi-disciplinary providers (media, creative, PR, experiential etc.).

While in theory this may appear to be an attractive proposition, Enth Degree has not yet seen a single supplier that is able to offer best in class services across disciplines.

What the “one stop shop” model has yet to realise, is that marketers who consider this model continue to deal with multiple suppliers. It’s just that they are under the one roof (It’s like shopping at a department store. The convenience stops at the location. You still need to attend multiple levels and counters to get what you need.).

Key Implication: Marketers should thoroughly assess those agencies that claim to provide the gamut of communication needs to ensure they can deliver best in breed work, service, and economy.