The status quo of TV... and possible developments for 2007

Mandates

One of the over-riding influences on television as a marketing ingredient in 2006 has been ICASA. It has reportedly tightened its controlling influence over airtime and will ultimately cause the price of spot units to increase across all television stations.

SABC is allowed 12min max of advertising per hour and an average of 10min per hour from 5am - 12am (this includes sponsorship support but not station self-promotion).

The SABC adjusted its programming at the end of March 2006, moving away from its heavy concentration into mandated local dramas and local programming to the more popular international programmes. This, it believes, should improve audience levels on SABC stations, particularly SABC 3.

On the opposite side of the coin, M-Net will lose its Open Time window in April next year and this is expected to strongly negatively affect its audience ratings.

The introduction of a second pay-for TV license is also likely to have an adverse affect on M-Net's audience delivery capabilities, subject to the programme content mandate imposed on the new station.

TV inflation

The 'Inflation Bad Guys' were M-Net, which increased rates by 8.7% but lost total adult audience to the tune of 12.1%, resulting in a Media Inflation Watch increase of 23.7%, and SABC 2, which increased rates by 7.5% but lost audience by 12.3% for an effective 22.6% effective Media Inflation Watch rate.

The 'Inflation Good Guys' were SABC 1, SABC 3 and e.tv, all of which increased their audiences. While e.tv increased its rates by 19.6%, this was offset by a 26.3% increase in audience to result in a Media Inflation Watch rate of -5.2%. Similarly, SABC 3's 12.7% rate increase, coupled with a 10.3% audience increase, produced a Media Inflation Watch rate of 2.2%.

In SABC 1's case, a rate increase of 7.9%, matched against audience gains of 4.8%, resulted in Media Inflation Watch inflation of 3%.

Overall, television rate inflation for January to June 2006 was 10.9% higher than the same period in 2005. In addition, this inflation was higher than the all media inflation; it peaked at 9.9%. But, given audience increases, the overall television Media Inflation Watch rate was just 7.8%.

Overnight ratings

Overnight ratings - ratings made available by 11am on the morning after broadcast - were tentatively introduced from July 2006. Previously, ratings were delivered a week after broadcast but were, in fact, only available a week to 10 days after broadcast.

At this point, the various broadcasters are still putting their systems in place to facilitate overnight trading. This system, Landmark II, is already installed at the SABC, as well as at Oracle Airtime Sales. e.tv expects to be up and running by April 2007.

The major draw card for overnight ratings for media planners is that they allow for immediate response to correct under or over delivery of audience by either the purchase of additional spots or the cancellation of those already booked. The SABC claims that these overnight ratings have, to date, only had a negative impact on sales as some clients are cancelling once their objectives have been met, and have yet to use the system to purchase additional slots.

South Africa is one of the only 'first world' countries still trading television in a cherry-picking programme environment; buying according to programme content and environment. In other first world countries, television is bought on the basis of delivery of total ratings, or on an agreed cost per rating or against the station's average cost per point.

In SA, stations are still considering the best way to present and trade with 'overnights'. The SABC aims to have a policy in place by April 2007 (realistically probably more likely to be July) and Oracle hopes to be very close behind, even though the DStv bouquet is difficult to incorporate into the system and ratings are very unstable.

Issues for 2007 and overnight ratings

One of the major considerations facing stations is whether to trade against guaranteed ratings (ARs), a certain CPP, or station average CPP?

If they do move into a guaranteed rating environment, they will take planning away from the agency media planner to do it themselves, which in turn means they'll need to staff up and, to be able to guarantee a price or rating level, they will need to place spots in non-prime as well as prime programming slots.

The major implication for clients is that that they and their agency and planners will no longer be able to choose where they want to place their ad. If they do, they'll have to pay a premium.

The SABC says it is unlikely to move straight into a guaranteed rating environment because the ratings are too unstable, with considerable fluctuation from one day to the next.

Scary, too, is that despite a Media Inflation Watch rate of 9.9% for television for the first half of 2006, a source at the SABC said that they anticipated possible increases up to 30% going forward, thanks to the changing environment.