ANA's Liodice Calls for TV Fee Reform

NEW YORK Association of National Advertisers president Bob Liodice said he is "optimistic about the long-term health and well-being of television as a preferred medium of choice by marketers," but qualified that by urging the networks to stop their "foot-dragging" and work to satisfactorily resolve "well-known advertiser issues with TV."Among those issues, he said, are commercial clutter, higher CPMs in the face of declining ratings and the network integration fees.Liodice made his remarks today at the annual ANA TV Advertising Forum in New York."The Big Three networks [ABC, CBS and NBC] continue to rile marketers with this archaic legacy expense that bears no resemblance to today's cost structure," Liodice said in reference to the integration fees charged to advertisers by the networks," he said."Marketers are paying over $100 million per year for an activity that no longer occurs. Candidly, we don't understand why the networks don't come up with a unified cost model and end this ancient practice," he added.Integration fees were put into place by the networks years ago when a person had to manually place a commercial into sequence. Today, that process is computerized.Speaking later in the day, CBS chairman Les Moonves said he would consider discussing ways to moderate such fees. "There is still a cost of putting the commercials into our shows," Moonves said. "But we're willing to talk about it. It is something that should be looked at and our people will be willing to do that." Liodice also warned that those networks whose ratings are down should not be looking for higher CPMs in the May upfront. "We're still hearing rumors about CPM increases substantially exceeding inflation," he said. "Call it supply and demand, but if we're looking to build a foundation for television to become the medium of choice, this is not the way to do it." On the positive side, Liodice said he believes that the convergence of high-definition TV and the digital power of the Internet "will flourish in the years ahead." "The convergence opportunity will be channeled through one of the most important future tools for marketers—the set top box," he said. "This virtual in-home computer will become the advertisers' best friend and will be the foundation for lots of positive change for television advertising. In particular, the data that cable companies will be able to provide advertisers will, for the first time, deliver important measurements and metrics and facilitate the level of accountability so needed by the marketing community." Liodice said he also sees branded entertainment opportunities continuing to evolve and become more creative on television. "These vehicles will provide alternatives to the traditional 30-second spot by generating more personalized advertising and content specifically focused at target consumers," he said.Sixty-three percent of marketers surveyed by the ANA said they had participated in branded entertainment projects in the past year, according to a study presented during the forum today. The ANA said it surveyed 118 senior marketers.Among the findings: 42 percent of respondents said the top benefit of incorporating branded entertainment into their marketing mix is to make a strongeremotional connection with the consumer. While 60 percent of respondents stated that branded had been negotiated as part of their company's deals in the past, 80 percent feel that it will be a part of their upfront deals in the future—an increase of 20 percent.Eight-two percent said that branded entertainment is funded via a shift from other budgets with only 18 percent funding it incrementally.

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ANA's Liodice Calls for TV Fee Reform

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