×

Still Counting on the Power of Television

TV or not TV? On Madison Avenue next year, leading forecasters say, that is not likely to be the question.

A major reason those forecasters are predicting that the advertising industry will recover faster from the recession than they had expected — both in the United States and globally — is the continued, strong demand among marketers for commercial time on television. That is being demonstrated, they say, in most developed markets as well as in emerging markets like China.

The robustness of the ardor for television ads is startling some forecasters, who had believed that the intensifying demand for online advertising would cut into sales for TV as it has for, say, newspapers. That does not seem to be the case, even as they point to a sharp climb in spending for Internet ads as another reason the recovery will proceed — and even gain momentum — into next year.

“The success story, perhaps surprisingly, has been television,” said Steve King, chief executive at the ZenithOptimedia media division of the Publicis Groupe.

tv_remote_200.jpg

TV is, by his estimates, still gaining share of the overall advertising market, he added, to 40.7 percent in 2010, from 37 percent in 2005.

Consumers’ embrace of technologies like digital TV, HDTV and DVRs helps keep them watching, Mr. King said, which helps keep marketers buying commercial time.

Mr. King spoke on Monday during a panel at the opening of the 38th annual UBS global media and communications conference, which is being held in Midtown Manhattan through Wednesday. His remarks were echoed by the two other panelists as they offered forecasts for how 2010 would end and what 2011 might bring.

“TV will be adding about half of all growth next year,” said a second panelist, Adam Smith, futures director at GroupM, the media unit of WPP.

Later, in an interview, Mr. Smith elaborated on why he thought that would be the case. For one thing, he said, television viewership is being propelled by people who are increasingly watching certain shows to share comments with friends and family in real time on social media like Facebook and Twitter.

That is particularly stimulating live viewing of programs, he added, “which is what is monetized” by the providers of TV content like the broadcast networks and cable channels.

A case in point is the demand for commercials during Super Bowl XLV, to be broadcast by Fox on Feb. 6. All available ad time is already sold out, and it sold out earlier than is usual, despite rates that are estimated at up to $3 million for each 30-second spot.

Even marketers that had never advertised in the previous XLIV — er, 44 — Super Bowls are buying spots, among them blue-chip brands like Best Buy and Mercedes-Benz.

“Television continues to be resilient,” said another panelist, Brian Wieser, global director for forecasting at Magna Global, part of the Mediabrands division of the Interpublic Group of Companies, even as other media like mobile and the Internet are likely to grow faster.

In fact, Mr. Wieser said, he has added a category, called pay TV, to those he tracks in producing his forecasts. The new category covers television variants like cable, satellite and Internet TV delivered by phone companies.

Mr. Wieser said he foresaw no dire effects on traditional television from the growth of what is known as over-the-top TV, which is delivery of programming through the Internet by means like the new Google TV, developed by Google, Intel, Logitech and Sony.

There could be 20 million to 25 million people watching TV that way by 2020, he added. That would be a fraction of those viewers still watching TV through cable systems, satellite or even over the air.

“Despite all the other viewing options, most people still like watching TV at home on a TV set,” said Steve Sternberg, the longtime television research analyst who writes a blog, The Sternberg Report.

As for access to TV on additional screens like PCs, tablets or smartphones, it could “enable people to sample shows they may not have had time for on traditional TV,” Mr. Sternberg wrote in an e-mail, as well as give viewers a chance to watch more episodes of the shows they typically watch on traditional TV.

The health of television as an ad medium clearly delighted another speaker at the conference.

“This is more like it,” said David F. Poltrack, chief research officer at the CBS Corporation and president of its CBS Vision unit. “After two years that have not been pleasant for any of us, things are looking up.”

Television is increasingly about “the development, nurturing and harvesting of franchise programming,” Mr. Poltrack said, that viewers will want to watch on conventional TV sets, the Internet, mobile devices, video on demand, DVDs and in syndication.

Among them, he listed series like the “CSI” shows on CBS, “Grey’s Anatomy” on ABC, “The Office” on NBC and “American Idol” on Fox.

Three drama series that CBS introduced for the 2010-11 season — “Blue Bloods,” The Defenders” and “Hawaii Five-0” — are already profitable, from their network licensing fees and international sales, Mr. Poltrack said, with additional revenue like syndication in the offing.

Even better, in Mr. Poltrack’s (CBS) eye, all three series are being produced by the CBS Television Studios division of CBS.

All the forecasters on the opening panel predicted that 2010 would end with an increase in worldwide ad spending compared with last year. Their forecasts were for an increase of 4.9 percent, from Mr. King; 5.9 percent, from Mr. Smith; and 6.9 percent, from Mr. Wieser.

They all also predicted an increase in worldwide ad spending for 2011 compared with 2010. Their forecasts were for an increase of 4.6 percent, from Mr. King; 5.4 percent, from Mr. Wieser; and 5.8 percent, from Mr. Smith.