In need of a new equilibrium in TV Advertising in GR

/, Marketing, Media/In need of a new equilibrium in TV Advertising in GR

In need of a new equilibrium in TV Advertising in GR

The coming few weeks hold some of the most stressful moments for TV broadcasters and especially for the existing ones. If the licensing process goes on uninterrupted by the High Court (StE), which will convene in full synthesis on July 4th, the exact same date as the deadline for submission of applications, it will mean that in early Aug, each candidate will have to present a letter of guarantee for 3 mil Eu, which under the current liquidity issues of the market and the level of borrowing of the players, is not an easy cookie to swallow. This amount is expected to remain blocked for successful candidates, till they pay all installments of their bids. A rough estimate for this, is appx. 18 months. Then suppose that during the bidding process, a 10 year full HD license is eventually bought at 6, 8 or even 10 mil Eu. The channels will have 8 months to upgrade their equipment to full HD broadcasting, a cost of about another 5 mil Eu.

And how strong the advertising market is to support all this? There have been peaks, like in April 2016, that led also prices up to apprx. 10%. But the market is not on a steady growth course. The April demand weakened in May and there is also a big pressure on prices, with CPR lowering below May 2015. And we live in a situation where agencies are not finding the airtime needed at the prices they have promised in media pitches of recent months, pushing hard for CPR to go further down. So we are heading for a deadlock, where on one hand we have the needs of the channels (loans repayment/ cost of licenses & equipment/ investments in fresh productions at a time that TVRs are weakened) and on the other the needs of the agencies that have overpromised to clients and at the same time need high rating programs while the available airtime capacity is at its upper end. Why demand strengthens? The three reasons surfacing easily are: 1. Retail sales are down and need support (-7.5% in S/M sales reported from IRI for the first Q) 2. Because a wide range of brands feels the pressure from  Private Labels and Telemarketing 3. Because still the TV airtime cost is reasonable.

It seems thus that a new common “reading” of the situation TV advertising is in is a must for the “tripartito” of Advertisers-Agencies-Channels, for a new equilibrium to be found.

Share the joy
  •  
  •  
  •  
  •  
  •  
  •  
  •  
By | 2017-03-22T11:35:06+00:00 June 24th, 2016|Advertising, Marketing, Media|