Friday, August 07, 2009

Bad Economy Or Just the Beginning? TV "Upfront" Ad Sales Way Down

It is that time of year when TV execs from the traditional major networks (CBS, ABC, NBC, Fox) finalize bulk ad sales for the upcoming new fall TV season -- so-called "upfront" advertising commitments from the major ad agencies on behalf of their clients. And, the result? Drum-roll please ... the worst upfront results since 2001 -- both in terms of volume and overall ad revenues.

TV execs blame this on the bad economy. And, there certainly can be no doubt that the economy is significantly adversely impacting TV ad spends.

But, could there be more to it than that? Could it be that major advertisers are (finally?) reacting to the ever-increasing ratings slides at all of the traditional TV networks as consumers have more and more non-"traditional" entertainment choices (including watching their favorite TV shows on the Internet)?

The answer is a likely "yes" -- this year's results may not be the aberration that most believe they are. As I have written several times before, more and more TV programming will be consumed on the Internet -- and the traditional business models will need to adapt to this new reality.

And, that means, among other things, that the traditional upfront sales season will need to evolve into something not so traditional.