TV Selling Power to Decline

Advertising Age writes about a McKinsey study in the US context:

A study is about to give Madison Avenue a fresh pummeling: McKinsey & Co. is telling a host of major marketers that by 2010, traditional TV advertising will be one-third as effective as it was in 1990.

According to the report, real ad spending on prime-time broadcast TV has increased over last decade by about 40% even as viewers have dropped almost 50%. Paying more for less translates into a much higher cost-per-viewer-reached — a trend also true in radio and print.

Thank a combination of older technologies such as cable, PC computers, cellphones, CD players, VCRs, game consoles and the internet, along with more recent ones — PDAs, broadband Internet, digital cable, home wireless networks, MP3 players, DVRs and VOD– for those changes. And teens foretell an even more radical shift in future media consumption, the report points out: They spend less than half as much time watching TV as typical adults do. Teens also spend 600% more time online, surfing the web.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.