January 04, 2008

Conundrum For Some

Last year, in The Ad Contrarian book we wrote... "with increased fragmentation, any medium that can deliver a large audience—even if it is not as large as it once was—should be more valuable than ever."

The New York Post reported a few days ago that even though audiences for individual shows have declined, tv costs have increased significantly.

"...In the fourth quarter, advertisers on average paid 18 percent more for primetime ... spots purchased on the open market, compared with the year-earlier period..."

"...At the same time, the average rating sold in the fourth quarter... was down 14 percent from a year ago..."

"...It's a conundrum for advertisers: even as ratings fall, ad prices on network TV are soaring..."

It's not a conundrum. It's perfectly logical. Fragmentation makes it harder to find large groups of people. Any medium that can deliver large groups is going to be valuable. When there's another medium that can reach large numbers of people as effectively as tv, tv costs will go down. And not until.

While the advertising trade press may have gone all wobbly over the

internet, intelligent advertisers have not.

The laws of economics have not been repealed.


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