PART 2 — TV IS CRUMBLING FROM THE INSIDE OUT

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What are advertisers actually buying?

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Here’s something about television advertising that deserves more attention.

Stations sell program ratings. But that’s not where the commercials run.

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Sports.

In an NFL game, local commercials typically run pre-game, just before halftime, immediately after halftime, and at the end of the game. There may be a few units within the quarters, but much of the local inventory runs when viewers may be paying less attention.

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Prime time can have a similar issue.

Local commercials often run before the show and between back-to-back half-hour programs. In an hour-long network program, the local station may have only one internal break, with the network controlling the remaining inventory.

But late news may be the best example.

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Stations can't change the commercial breaks inside national network programming. During locally produced programming, they control the clock.

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What was traditionally an 11:00–11:30 newscast has often been expanded to 11:35, with much of the commercial inventory pushed toward the final portion of the newscast.

That may help keep viewers engaged earlier in the program.

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But is it good for the advertiser?

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If viewers start tuning out before those later breaks, advertisers may get fewer viewers for their ad dollar.

And let's not forget something fundamental:

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Advertising keeps the lights on.

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This break structure is one reason posting a television schedule can be challenging. Even sophisticated buyers who break average schedules can find themselves on the wrong side of the equation.

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You can only disappoint your core customer so many times before they start looking for alternatives.

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Another issue worth considering is commercial load.

A decade ago, a typical 30-minute local newscast might have contained roughly 22 minutes of news and 8 minutes of commercials. Today, that balance can look more like 18 minutes of news and 12 minutes of commercials.

More inventory. Less content.

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At some point, you have to ask whether you're improving the product's economics or slowly diminishing its value.

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I don't claim to have the answers. I'm simply pointing out what I believe are structural flaws in the model.

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You could raise a similar concern about a large portion of CTV. A commercial can run early in a program, late in a program, or during a particular break.

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But there is an important distinction.

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CTV is purchased based on impressions delivered.

If an advertiser buys 500,000 impressions, the campaign is measured against whether those impressions were served. Over the course of the campaign, individual break placement can effectively balance out because the advertiser is paying for impressions delivered.

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Traditional broadcast doesn't work the same way.

A schedule is purchased largely based on the audiences associated with programs and time periods.

If significant commercial inventory is pushed into portions of those programs where fewer viewers are actually watching, there isn't necessarily something later in the schedule that automatically makes the advertiser whole.

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That's the part I think deserves more scrutiny.

For decades, advertisers have asked:

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What rating did the program get?

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Maybe it's time to start asking a different question:

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Where did my commercials actually run, and how many people were actually there to see them?

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