Ad industry supports CCTA proposal to run paid advertising on U.S. specialty channels

Canada’s advertising industry is lending its support to a proposal by cablecos that commercial advertising in Canada be sold on U.S. specialty TV services such as CNN and A&E. Robert Reaume, VP of policy and research at the Association of Canadian Advertisers (ACA), says that the proposal would be even more enticing if the avails on the U.S. channels were sold on a regional or even local market basis. "We get complaints at certain times of the year that Canadian advertisers find it difficult to purchase the necessary time that they need during the high demand periods. So, this would at least relieve some of that," he tells Canadian Communications Reports. "The need is certainly there for more outlets, particularly at the local or regional level. I mean we have enough national coverage. Advertisers have enormous choice for coast-to-coast coverage these days with all the specialty channels that the commission has licensed. And we’re not complaining. They’re all terrific and it gives us great choice. But the local choice has not kept pace with the demand." Reaume suggests that the CRTC greenlight selling Canadian ads on the U.S. stations, but stipulate that it be done on a regional basis - possible, he says, because cablecos generally serve particular areas of the country. For example, Rogers in Toronto could sell its advertising time on the U.S. channels separate from Rogers in Ottawa, he notes. "There are some regions in the country - I’m thinking of Alberta, for instance - that during high demand periods, there’s money that just goes wasted. There’s money that goes to other media because advertisers can’t find adequate TV time to purchase," he says. He also points out that the proposal, unlike the CRTC’s advertising recommendation with regard to boosting homegrown TV drama, would not contribute to ad clutter. The ACA opposes the CRTC suggestion that broadcasters be given extra commercial minutes per hour in exchange for airing original Canadian drama (CCR, July 5/04). "This doesn’t increase the minutes. Those spots are already there, and being filled with material at the moment. So if you replace them with paid spots, there would not be a noticeable difference to the viewer," he states. "Now, if the cable association was suggesting that we sell those two minutes and add two minutes, then we would not be (in favour of) the additional two minutes. As far as I understand it, this can all be accomplished without creating any impression of additional ad clutter to the viewer, and that’s one thing we liked about this proposal." There is currently a proposal by the Canadian Cable Telecommunications Association (CCTA) before the commission asking permission to air two minutes an hour in paid commercials, and another by Vidéotron ltée seeks to use 50% of the local avails. The ACA’s October 7 submission to the CRTC in the proceeding notes, "As an advertising medium, television has been underdeveloped in Canada, its per capita ad spend ratio being only one-third that of the U.S. The number of viable commercial outlets available to Canadian advertisers is also a fraction of that in the U.S….We believe that the CCTA’s proposal will help grow TV advertising revenues in Canada, and will accomplish this without creating any new fragmentation of audience." According to the ACA, Canadian advertisers spend annually about $2.6 billion of total advertising spending of $10.9 billion on TV advertising. But, complains the ACA, Canada’s advertisers have had to cope over the years with increasingly restricted access to Canadian audiences. "Approximately one-quarter to one-third of all viewing in this country is to signals that cannot be commercially accessed by advertisers in Canada," reads the ACA submission. "The CCTA’s proposal, which would allow advertisers access to the so-called ‘local availabilities,’ helps to redress this inequity by repatriating audience and revenue to Canada’s broadcasting system." The CCTA has proposed contributing 25% of additional revenue generated from selling paid ads on U.S. specialty TV channels to the Canadian Television Fund (CCR, May 23/03). The Canadian Association of Broadcasters (CAB) is urging the CRTC to reject the proposal, partly because it believes that advertising dollars would be transferred from Canadian conventional and specialty TV channels to the U.S. channels (CCR, Oct. 7/04). But Reaume sees that as a moot point. "It’s a marketplace. Canadian viewers chose to watch programs that they have available to them, and whatever they choose - I mean that’s worth something, and the money should flow to where the audience is, not just to companies that have broadcasting licences. I mean just because they have the business now doesn’t mean that they should keep the business if their audiences are not keeping pace or growing."

Ad industry supports CCTA proposal to run paid advertising on U.S. specialty channels

News | 10/22/2004 4:00 am EDT

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