Platform migration shakes up annual TV ad market

The transition of television content to new media platforms is shaking up the advertising market. The broadcast “upfront” market, a long tradition on Madison Avenue, found itself in new territory last week.

The unexpectedly fast and furious embrace of new media by the big broadcast television networks is having a big affect on the plans of advertisers and agencies to buy billions of dollars worth of commercial time.

“The networks are recognizing that the way people are consuming television is changing, and the money is going to follow that,” Joe Mandese, editor of MediaPost in New York, an online and print trade publication, told the New York Times. He added that last week's upfront could well be “a watershed.”

The annual rite is known as the upfront because the negotiations between the buyers and the network sellers take place in the spring, ahead of the fall TV season. After the unveiling of the schedules of each network, bargaining begins over how much the advertisers will pay as well as which shows they will sponsor or snub.

But, the Times reported, the rapid migration of TV shows onto Web sites, iPods, cell phones and other fledgling venues is shaking up the conventions of this year's advertising market.

The networks realize they cannot stand pat in a rapidly changing media distribution environment, the Times said. Marketers have not been waiting for the upfront market to decide between traditional media and their new-media rivals.

Rather, the newspaper said, they are turning over a significantly increasing portion of their ad budgets to new-media specialists like AOL, Comcast video-on-demand, Google, MSN and Yahoo.

You already see ad dollars leaving the traditional media and going into the digital space, said Bill Cella, chairman and chief executive at Magna Global in New York, part of Interpublic Media.

The trend “is becoming more pronounced,” Cella said, adding: “I look at it not as fragmentation, but as hyper-fragmentation. It's mind-boggling.” Just as its clients have to follow their customers into the new media, Cella added, the networks too have to follow their viewers there.

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