It was a bit of a case of “What they said” as the Association of Canadian Advertisers (ACA) and Canadian Media Directors’ Council (CMDC) made a joint appearance on the final day of the CRTC’s “Let’s Talk TV” hearings last week.
Like other groups before them, they used their appearance to speak out against the proposed adoption of a pick-and-pay system and the elimination of simultaneous substitution.
CMDC board member Anne Myers told the Commission that simultaneous substitution is “critical” to the Canadian broadcast system, providing advertisers with coveted access to sizeable Canadian audiences for the top U.S. shows.
“It is important to remember that though these shows may be American in origin, their audiences are 100% Canadian,” Myers told the Commission.
She noted that nearly one-fifth of all Canadian TV viewing is already going to signals not currently available to advertisers, such as U.S. cable and conventional channels, on-demand, pay-per-view, pay TV and educational. Further eliminating prime time audiences would have dire consequences, she warned.
“Removing this substantial amount of inventory from the marketplace will only create increased cost pressures for what little TV audiences are left and force advertisers to consider transferring ad budgets to other media,” said Myers.
“The idea of jeopardizing and destabilizing the entire broadcasting and advertising system is really quite unimaginable to us.”
CRTC commissioner Stephen Simpson told Myers that Canadian viewers have made it clear they want changes to simultaneous substitution and asked if it would be easier to adapt if it were gradually removed.
Myers was unequivocal, however, noting that much of the consumer displeasure stems from an inability to watch Super Bowl commercials – which are now widely available online.
“We’re a little bit unsure as to why lack of exposure to American commercials should be a major concern for the Commission,” she said. “The beauty of [simultaneous substitution] and the reason it’s worked so effectively from a business perspective is that it gives Canadian advertisers access to Canadian audiences.
“Any stoppage of that, whether it’s a hard stop or a phasing out, is going to remove those Canadian audiences from our ability to monetize them for Canadian broadcasters. We don’t see any benefit to that.”
The conversation prompted CRTC chairman Jean-Pierre Blais (pictured above) to ask: “Why haven’t we seen the same sort of… effervescence in Canadian ads?” to which ACA president and CEO Ron Lund responded: “I think creative agencies would think they do have that, but one of the biggest drawbacks is budget. Those commercials are multi-millions of dollars, and our market can’t justify that. No marketer in Canada has that type of budget for a single commercial.”
Echoing earlier statements about pick-and-pay, the CMDC also warned that such a system would ultimately result in less consumer choice, with many niche services not surviving the transition.
Janet Callaghan, the CMDC’s executive director, warned that the loss of such services would impede advertisers’ ability to reach more discerning TV viewers, resulting in fewer ad dollars being funneled to the broadcast system and the closure of under-performing channels.
“A move by the regulator to unreservedly disrupt the current funding formula for television will significantly diminish the richness and the diversity of Canadian audiences, and with it the support of advertisers,” she cautioned. “We believe the Commission should reconsider an unrestrained pick-and-pay option to avoid going back to the days of channel scarcity now that consumers have been exposed to a landscape of plenty.”
The ACA also used its appearance before the CRTC to reiterate its position that the Commission should open up U.S. ad avails to Canadian advertisers.
Bob Reaume, the ACA’s vice-president (pictured right), policy and research, told the Commission that opening up avails would allow “many millions” of dollars to be injected into the Canadian system.
Reaume said that several previous proposals to monetize these avails (all of which have been rejected by the CRTC) “have merit,” and could slow the erosion of TV advertising revenue to other platforms without creating additional fragmentation.
“We suggest these proposals be re-examined as part of a CRTC review process,” said Reaume, noting that many advertisers are now utilizing the video-on-demand platform after the barriers to access were removed by the CRTC several years ago.
The groups also advocated for a set-top box (STB)-based measurement system, with Callaghan saying it would “dramatically improve” the accuracy and depth of information available to both broadcasters and advertisers.
“Television is changing rapidly, and the tools and metrics we need to continue to support it must change as well,” she said. “It has evolved into a complex structure requiring better measurement and more data points,” she said.
The CMDC advocated the creation of a joint industry committee comprised of sellers, buyers and media management companies. Like others before them, the groups also said that the creation of an STB measurement body would not require CRTC oversight.
