TV’s Role in Media Advertising Marketplace – Competitor Acknowledgment

Recent reports of more online/digital companies using television as a key advertising vehicle has furthered buoyed the fortunes of this media.

After a remarkable 2012 in political advertising sales, many local television stations this year felt in a comfortable position. Even with all of the online and social advertising options available and used by many political campaigns, local television stations still garnered a substantial amount of that total political spending. Other major advertising categories, such as automotive dealers also continue to increase their spending on local television stations. As a result, BIA/Kelsey projects a continued increase in local television stations’ advertising averaging 3-4% per year over the next few years (higher in even numbered political/Olympic years, lower in the odd years). For the overall forecast, including television, click here.

Investors also had renewed confidence as the price of publicly traded television companies soared, up by over 185% in the first three quarters according to BIA/Kelsey’s stock index of local television station companies.

But, perhaps nothing is more assuring to local television stations than the continued use of local television stations by many digital/online companies. According to a December 2^nd Wall St. Journal article, many digital/online companies are turning to television to broaden their advertising campaign to attract new customers. While many had historically only used online advertising, their switch to television highlights the ability that television stations provide – mass audience reach. For example, Eharmony.com, a major online dating service reportedly is spending 75% of their total advertising budget in television.

Of course, local television stations cannot just rest on this additional advertising. It must continue to “reinvent” itself to compete against the ever expanding number of new competitive media. At next week BIA/Kelsey’s Leading In Local conference these new media will describe their advertising growth strategy.

Yet, much like radio stations in the late 1990s that aired ads from their competitors such as local yellow page companies (use the resonant voice of James Earl Jones), local television stations must have a similar sense of satisfaction when they sell advertising time to these online/digital companies.