Networks Shape Up For Fierce Ratings Battle
The Age
Monday February 8, 1999
The 1999 television ratings battle starts today, with the industry poised for one of its toughest years as television networks vie for market share to augment average advertising rate increases of 5per cent.
The chairman of Australia's largest independent media buying group, Mitchell & Partners, Mr Harold Mitchell, said all three commercial networks would be more aggressive in their sales tactics as they battled to gain extra advertising dollars.
``The owners are being driven by the sharemarket and have squeezed every last ounce out of every area, so it will now be up to holding their ratings and market share," he said.
``One per cent of the $2.3billion metropolitan TV market is $23 million - add that to Seven's result and it makes a big difference. Especially if Nine took it off them."
Sources said the Nine Network was believed to have secured 40.5per cent of all metropolitan television advertising revenue in 1998, Seven 34per cent and Ten 25.5per cent.
Media buyers said the first week of ratings would be closely monitored.
``Advertising rates can be influenced very significantly because if the station is performing below expectations they would have to offer clients incentives to continue spending at the agreed rate, such as free air time," one said.
But some doubted whether Nine had achieved rate increases in the ``high single digits" as stated by Mr Nick Falloon, the chief executive of Nine's owner, Publishing & Broadcasting Ltd.
One major buyer, who declined to be named, said their contract renegotiations with Nine were ``nowhere near the high single digits".
But Nine's national sales director, Mr Vance Lothringer, reaffirmed that Nine had achieved high single-digit growth.
``You would expect to pay a little bit more than the average for the leading network," he said.
Mr Mitchell said if Nine was to achieve high single-digit growth it would only be by lifting its market share, particularly in Sydney.
``Nine will have to take a particularly aggressive approach to both market share and maximisation of their rate card to get high single-digit growth," he said.
Meanwhile, Seven's national sales director, Ms Maureen Plavsic, has confirmed that Seven has given advertisers an ``assurance" that its audience share would not be below that achieved in the last 12 weeks of 1998.
Seven had a poor start to 1998, but finished strongly after introducing programs such as Ally McBeal and Jag.
A media buyer said an assurance differed from a guarantee, as a guarantee implied there would be point-for-point compensation if Seven's ratings fell. However, an assurance meant it would negotiate compensation if ratings targets were not met.
The managing director of The Media Edge, Mr John Neal, said Nine had a strong program line-up for 1999 but was vulnerable in news after the departure of Brian Naylor.
He said Seven would hope for a more consistent year in the ratings, while Ten would work on its position with its target 16 to 39-year-old audience.
© 1999 The Age