CBS chief research officer David Poltrack might as well have been wearing sunglasses as he gave his forecast for the broadcast business to an investment conference on Monday.
In a sunny forecast, Poltrack said that broadcast was improving its standing with viewers, with advertisers and with distributors.
"Broadcast network television not only remains the dominant mass medium today, but that it has enhanced its mass medium status by amassing viewers through new distribution channels," he said to the 39th annual UBS Media and Communications Conference in New York.
He pointed to new research that shows that broadcast advertising is more effective than commercials on cable and predicted that broadcast would begin to gain share against cable.
In the short term, Poltrack predicted that broadcast network ad revenues would be up 7.3% in 2012.
While the state of the economy has created some concern among advertisers, fourth-quarter scatter prices remain above upfront levels.
"The latest economic setbacks have resulted in the advertisers operating under a caution' flag during the fourth quarter of 2011," Poltrack said. "They are jockeying for position, conserving fuel, and fine-tuning their race strategies, but no one has dropped out of the race. As soon as the economic clouds clear and the green flag is given, they will begin competing at full throttle to capture a share of the increased consumer spending. The only question is when they will see that green flag."
So far this season, the commercial ratings used for buying and selling advertising are up for the broadcasters overall, with Fox (thanks to a seven-game World Series with high viewership and little DVR use) and CBS showing gains among both adults 25 to 54 and persons 18 to 49.
At the same time, the ratings of the top 10 cable networks in terms of ad revenue are down.
CBS and other broadcasters are also picking up viewers online. CBS has increased the commercial load on its full-episode power to 14 ads per hour.
"What that means is that a viewer streaming our program online is now worth substantially more to us than a person watching that program in playback mode and skipping many of the commercials," Poltrack said. "In fact, the value of the online viewer is now surpassing that of the live viewer as well."
He added that VOD is growing as a distribution medium for primetime network programming. "At CBS we have seen a 19% increase in VOD viewing of our primetime series this fall," he said.
Increased viewership is one reason why the cable networks' 52% share of ad dollars might be as high as it gets. In fact, the trend might reverse and start to come down, according to Poltrack.
"We have isolated 36 product categories each with over $20 million in spending between broadcast and cable and over 60% of that money is going to the cable networks,' he said. "Just getting these categories back to the all-category 48/52 split would add $344 million in broadcast network spending."
Poltrack said that single-source research from companies like TRA allow marketers to figure out the return on investment for each part of their ad campaigns.
"Recent work by TRA has specifically addressed the issue of the broadcast/cable mix of television campaigns," he said. "In this work, TRA found that campaigns with over 50% of their GRPs on the Broadcast channels delivered consistently higher ROIs than campaigns with over sixty percent of their GRPs in cable."
CBS is working with consumer package goods marketers who tend to buy cable because of its lower CPMs, to use single-source data from TRA and Nielsen's Catalina Solutions, to show that lower CPMs are less relevant compared to the superior ROI of broadcast network campaign.
"I believe that this new research capability will motivate advertisers to shift ad dollars back to broadcast primetime," Poltrack said.
Poltrack also pointed to new tools being made available to planners and buyers that allow them to put shows on a media plan based on actual product consumption rather than the more traditional age and sex based demographic.
"Volumetrics enables Nielsen Catalina Solutions to define television audiences for advertisers in terms of actual product purchase behavior as opposed to surrogate demographic measures," Poltrack said. "The application of this form of audience evaluation often substantially changes the relative ranking of programs."