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Contact Ken Custer at 303-277-9840.
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WILL THE FCC OWNERSHIP RULING EFFECT ADVERTISING?
By Ken Custer
Recently, the Federal Communications Commission dramatically changed the rules of media ownership allowing for much broader coverage in all markets. The new rules now allow ownership of radio, television and newspaper in the same market reaching up to 45% of the people in that market.
Advertising & Marketing attempted to survey agency media people and advertisers to determine if this ruling might effect advertising and rates both locally and nationally. The attempt did not produce a lot of responses, about 10%, but there were enough good comments that we feel it is worth reporting.
The local questions were:
- Do you feel the ruling will change the Denver media ownership status?
- Do you feel the ruling will effect rates for radio, television and print and if so by what percentage?
The national questions were:
- Do you think the ruling will effect national rates for all media?
- Will the possibility of a national group ownership media buy be a positive or negative?
We also included one non-media question:
- Is the idea of increased group ownership a positive or negative in the dissemination of information and editorial policy?
All recipients were promised their names would not be used.
On local question number one the responses included:
- Yes
- Some impact
- The big guys will get bigger
- Probably not as the consolidation has already happened in Denver.
Local question number two on rates:
- Yes
- Rates are more a function of supply and demand
- More than likely plus forced packaging
- Negative effect.
Nationally, will it effect rates?
- Yes
- More reflective of supply and demand
- Big conglomerates will use their big hammers to force higher rates
- No - look at this year's up-front TV market for the national broadcast networks with double digit price increases, smaller audience share and record advertising investments.
On the question of group ownership buys:
- Positive
- Probably a negative as group ownership in the past has resulted in lower levels of service, less flexibility and desire to win a piece of business.
- Positive in that advertisers may be offered package deals and get exposure across a wider variety of media.
- Negative, as it will take away from selecting media vehicles for targeted message delivery and for all of the right reasons.
So far it has been a non-event as convergence of media has not materialized to a significant degree, in fact AOL/Time Warner, Universal and Vivendi are talking about breaking up their conglomerates.
The answer to the one non media question about dissemination of information and editorial policy was a huge negative except for one neutral and one very astute comment from Bob Taber at Thomas, Taber, Drazen (he authorized use of his name.) "This is the real issue, isn't it? The degree to which large media corporations depend on large advertiser corporations for mass revenues dictates a 'do not ruffle' policy and the potential for sameness in programming, editorial perspective and target audience appeal. In true capitalist fashion, however, that opens the door for counter-trending upstarts who shake up the status quo and attract a new audience for anew group of advertisers."
It is our feeling that the Denver media ownership picture will not change dramatically as it already has. Denver newspaper, radio and television has already sorted itself out. Local rates will go up (look at the newspaper rates when the Post and News formed the Joint Operating Agreement). The survey estimates 10-15%. Nationally from the advertising standpoint, it is really up in the air and no one knows. There will be pluses and minuses. The editorial question was a no-brainer but an entirely different topic for another day.
Thanks to those who participated in the survey. The responses tell me that the media buyers in Denver really do know the business.
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