April 11, 2009

These days, Internet marketers prefer to stick with the tried and true. Marketing methods that have always worked in the past are considered their best bets and that is what they concentrate on. After all, why take a risk on something that is unproven they say.

Marketing budgets are now cut to the bone and Internet marketers have been taking a small pause in the last couple of months. However, some major broadcast and cable TV networks are suffering a little less than other segments, thanks to the continued demand for national TV advertising.

However, since this severe economic downturn that began in September and October of last year, the largest national TV players have been weathering the storm a bit better than local television and radio, and especially newspapers.

The larger cable networks (USA, TNT, ESPN, FX, Lifetime and MTV) also have suffered less because of how they generate cash through subscriber fees from cable and satellite TV operators, the same revenue stream that has made cable such a vital profit center for Hollywood's biggest companies.

Panicky Internet marketers are now plowing the lion's share of their marketing resources into the old-media outlets that they know can sell their products or services. TV networks are bracing themselves for tougher months this summer that will translate into radical changes in the way they do business.

"It's not exactly a disaster" is the best assessment that Jack Myers, publisher of the JackMyers.com advertising forecast service, can offer about the state of network TV advertising.

The big four TV networks braced themselves for some ad cancellations in the first few months of 2009. Local TV stations have been pummeled by the disappearance of key big-ticket advertisers like car dealerships and financial institutions.

However, the exodus didn't hit at the national network level, in part because the networks have bent over backwards in offering advertisers more time to decide when to trigger commercial buys.

TV network executives acknowledge the potential for conditions to get a lot worse in the second and third quarters of 2009, as ad sales forecasts show no sign of the recession ending any time soon.

CBS chief Leslie Moonves says "there are more buying options being dropped in the second quarter. Not a severe drought but certainly more than normal in some categories, and I do think that many ad agencies are getting nervous, there's no doubt about that."

That nervousness is benefiting network TV sales, even as Internet video viewing grows by leaps and bounds in the youthful demos most coveted by national advertisers. In the fourth quarter of last year, young adults in the 18 to 24 age group watched an average of five hours a month of video online, according to AC Nielsen Net Ratings.

Cable TV is certainly benefiting from the shift among Internet marketers away from buying spots on local broadcast stations in carefully selected markets to devoting that money to spot buys on lower-cost cable networks with broader national reach.

They simply don't have enough eyeballs to close the gap with their broadcast and cable brethren, least not yet.

Internet advertisers are still in the courtship phase and are not diverting sizable hunks of their TV spending to online video. This could change later this year, but that's the general concensus that Nielsen offers for now. Overall, the ad market for online video will be about $850 million this year, according to eMarketer.

Source: RFS.