Television Advertising that Works: An Analysis of Commercials fro ...

Television Advertising

Most advertising in television typically involves embedding the advertising within television programming content. Commercials can be delivered in numerous ways: participation in or a national buy gives the advertiser national reach, while a spot announcement delivered via the local cable or affiliate station and syndicated programs provides advertisers unique coverage opportunities (Wells, Moriarty & Burnett, 2006). Though once a pillar for national reach and mass audiences, broadcast networks lose audience share every year. By 2005, the average share of audience for cable television, 51.8, dwarfed the share for the combined seven traditional broadcast networks—45.9 (Lafayette, 2005). As a result, much of the television advertising money traditionally going to mass-audience-affiliated broadcast networks now appears to flow into more target-specific cable networks. Broadcast networks such as NBC have seen their early 2005 performance numbers for prime time decline, with some programs losing as much as 15% of their audience compared to last year. Furthermore, the 2005 upfront sales market for NBC plummeted to $800 million from the previous year’s $2 billion. Overall, broadcast network advertising expenditures have dropped from $11.9 billion to $11.2 billion in the years 2004 to 2005. The trend continues with advertisers leaving network television because prices continue to increase as audiences continue to decrease. In fact, not only are advertising inventories going unsold compared to years past, but also the loss of audience is creating an environment of what advertisers call makegoods (Lafayette, 2005).