'Tussle' Coming on Broadcast Ad Rates -Sorrell
Special to CNBC.com
There will be a "tussle" involving broadcasters, advertising agencies, and their clients over ad costs when the new television season begins, Sir Martin Sorrell told CNBC Tuesday.
The chief executive of advertising giant WPP Plc said his agencies "are able to shift money into cable and other forms of video and get the same reach and frequency at cheaper prices."
That will be reflected during the "upfront" meetings that determine the cost of advertising on broadcast TV shows.
"Agencies are trying to position themselves that the prices are not going to be as strong, the networks are trying to position themselves as though there’ll be more than double-digit increases," Sorrell said.
"So there’s going to be a tussle between the networks and the agencies and the clients about inflation in cpms," he added, referring to the "cost per mille," or advertising bought on the basis of cost per 1,000 impressions.
Despite the increasing power of online and cable media, he said broadcast TV viewing is not as bad as expected, perhaps because of the number of Americans unemployed. TiVo does help advertisers, he said, because those using it are "keen television watchers and actually watch the ads." The ads feature print, so those trying to speed through commercial breaks still know what is being advertised.