TV sales bosses split on future of spot ads

By By David Blight | 1 June 2012
Masterchef 2012 television ad.

As more advertisers demand content integration in TV programs, sales bosses from Seven, Nine and Ten are split on what this means for spot advertising and future revenue models.

Spot advertising still rakes in the lion’s share of revenue in the TV market, and content integration is nothing new, but an ever-increasing number of advertisers are looking to extend their brand in sponsorship deals that include creative integration into shows such as The Voice, My Kitchen Rules, The Block and MasterChef.

Nine Entertainment Co. group sales and marketing director Peter Wiltshire told AdNews: “We’ve been doing this stuff for years, but we are definitely getting more creative. The vast majority of revenue still comes from traditional media transactions, [but] this will reduce over time as we offer more complete business solutions.”

While Wiltshire said the portion of revenue derived from spots will reduce over time, he said they will always have a place. “You can’t have integration in isolation to spots. One amplifies the other. With more integration, you can charge for the extra value you are offering,” he said.

Seven West Media sales boss Kurt Burnette took a slightly different stance on the future of spot advertising. “Revenue might decrease in certain shows, but if the fastest way to reach a million people is still a TVC, then revenue from spots will be maintained,” he said.

“In the US, they are shedding audiences quicker than Australia but revenue from spots is on the up.

"More advertisers are swinging towards content integration, but this will add to the overall pie and won’t cut into existing revenue.”

Network Ten chief sales officer Mike Morrison argued certain advertisers will rebalance their budgets, but said the jury is still out on what this means for spot ads.

“As integration gets better, more advertisers are asking for it and I can see people rebalancing their mix,” he said. “But will spot revenues fall as a result? It’s too early to tell, but it’s definitely possible. The issue with integration is that advertisers can ask for it, but you still have to execute it.”

This article first appeared in the 1 June 2012 edition of AdNews. Click here to subscribe for more news, features and opinion.

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