Cable networks ‘offer advertisers unique opportunities’ and indus...
Cable networks “offer advertisers unique opportunities” and industry must “exploit those opportunities because none of us is really satisfied with getting such a small percentage of the pie,” Viacom Pres.-COO Mel Karmazin told Cable Ad Bureau conference in N.Y.C.…
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Tues. He cited statistics showing that cable accounted for only 5.5% of total ad pie as evidence that cable ads had bigger potential for growth compared with other media. Advertising “has become so much more important” than ever before that even in “unlikely” event of recession this year, ad dollars “will not dip” in 2001, Karmazin said. He said Viacom believes that overall ad revenue would grow 5.8% in 2001, with more “significant” increase likelier in 2nd half than in first because of “difficult” comparisons with first 6 months of 2000 owing to “dot.com” phenomenon. Karmazin said he started in ad business in 1967, “and in my entire career of selling advertising, I never saw anything like what we experienced with the dot.coms.” He complained that dot.coms were “freely” given “ton of money” by Wall St. to spend “in a manner that had no relevance to return on investment or toward getting results. It was all about getting more visible so they could sell more stock.” Future of cable advertising is even rosier than that of general industry, and if overall ad revenues are expected to grow 5-6% this year, cable ad growth will be at much faster pace, Karmazin said, without being specific. He said ad revenue had grown in every year since 1990 except for 1991 when Gulf War sparked recession. Chastising journalists, he said, who “write all those obnoxious reports” casting doubts about ability of cable ad industry to withstand recession, Karmazin said that in 1991 cable ad dollars jumped 14% when U.S. economy posted virtually no growth. He said factors that had made advertising relatively impervious to economic downturn included increasing competition, rising importance of branding and sheer growth in number of new products. He said proof that 2001 would be robust ad year could be found in results of CBS Super Bowl telecast; he said average commercial spot this year brought in $2.3 million compared with $2.1 million in ABC broadcast year ago, despite fact that number of dot.coms buying air time dwindled to 3 from 17.