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From The Department Of Duh: You Can’t Cost-Cut Your Way To Success

Two new studies underscore the importance of TV as an advertising medium, suggesting that while reducing costs is crucial, cutting too deep could cause permanent damage, TVNewsday reports.

The first study, The Future of Advertising project was conducted by the Wharton School in cooperation with the Advertising Research Foundation, found that TV advertising works “as well or better” than it did a decade ago. The other study, a survey of marketers by Forbes.com, found that one-to-many ad vehicles like TV are still better than one-to-one targeted ad campaigns (like online ads) for brand building. But, the study shows and we all know, tracking metrics with online ads is much easier, making them increasingly popular.

This leads to a perfect storm of advertising: targeted, more popular ads drive down the cost of non-targeted ads, while the targeted ones cost more to manage.

To address these shifts, Scot Lippstreau, a partner in Deloitte Consulting’s New York office told Mary Collins writing at TVNewsday, media companies will need to increase sales volume and cut ad management costs. Solutions will include simplifying and automating processes.

For example, a TV company that also has online platforms could develop a system that automatically combines invoices for both platforms. It takes work, and expensive systems, to streamline processes and ultimately save money.

“As Greater Media Chairman and CEO Peter Smyth said,” writes Collins, “we can’t cost-cut our way into the future.”

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