GATINEAU – “Overall, television itself as an advertising medium, remains very strong,” the Association of Canadian Advertisers vice-president of policy and research, Bob Reaume, told the CRTC this morning.
The annual Canadian ad spend on television is now at about $3.2 billion, and it’s growing, said Reaume, adding that TV’s share of the ad spend has been, and is remaining, stable, with small levels of revenue growth every year. “Year in and year out, TV has attracted about a quarter of all of the advertising spend in Canada,” he explained.
One of the primary concerns of the ACA and its members, Reaume told the hearing into the regulations governing BDUs and specialty services in Canada, is to hold the line on the amount of ad time specialties are able to offer per hour. Right now, it’s 12 minutes. On conventional, that number has risen to 14, with more to come.
The issue for advertisers is clutter. “Dozens or more commercial interruptions per hour is quite common,” said Reaume.
Also – part of the reason advertisers have jumped so whole heartedly to specialty, diverting some of their spend away from conventional broadcasters, is not just because of tighter target markets, but lower rates. “They can offer better rates because they are over-subsidized by subscription fees,” explained Reaume.
Beyond all that though, it is crucial for the Commission to let new technology take its course and roll into the TV industry, specifically, advertising on VOD and targeted, or dynamic, ad insertion.
It’s something the carriers are very interested in, but that broadcasters fear because no one knows yet how the money would be split among the programmers who own the programming and sell the ads – and the terrestrial video distributors who will perform the insertion.
Simply put, targeted ads are “more relevant for the consumer and more value to the advertiser,” said Reaume who then cautioned that if new, more interesting TV ad models aren’t allowed to develop, more and more personal video recorders will take hold, and then the level of ad spend on Canadian television will eventually drop.
(Reaume noted the ad industry doesn’t use the terms PVR or DVR, but CAM, for “commercial avoidance machines.”)
At the same time, Reaume also asked that the local avails be opened up for sale to Canadian advertisers. Currently, the two minutes an hour made available to cable by American cable channels like CNN and A&E have to be given, at cost, to Canadian programmers and are also used to push cable company product, too.
Opening the local avails to the market would “allow advertisers access to lost audiences,” said Reaume. He called the limitations on that ad time a “waste of a resource” and that it promoted unfair competition since only distributors can use them – for free – to advertise. “Competitive Internet service providers can not have access to that time,” he said.
(Ed note: However, if those spots are to be sold by the distributors, one wonders how often they’ll sell the time to their competition…)
