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Ad agencies keep their stake in show biz

By Maxine Shapiro, KERA 90.1 business commentator

Dallas, TX – TV advertising. Most of us comment more on the ads then we do the programs that surround them. We love 'em, we hate 'em, we judge 'em. A lot has changed since 1945 when television entered the scene, challenging the ad agencies' control over programming. Control is gone, but the costs are running away. I'm Maxine Shapiro with KERA Marketplace Middays.

Hard to picture it now, but when radio was the sole source of home entertainment, ad agencies ruled the roost. Beyond the news and sports, radio networks like CBS, NBC, and ABC were little more than "transmitter operators." Almost all of the control was dictated by the ad agencies. They owned the stars, created the shows, wrote the scripts and dictated the schedules.

Enter TV, and by 1949, it was now the most expensive medium. Less than a million viewers were watching that little black and white screen, and yet the costs were staggering. In 1951, NBC executive Pat Weaver (Sigourney's dad) knew changes had to be made. Agencies just couldn't afford to be the sole sponsor and producers of the shows. And if the programming was bad, stations got the blame, not the producing agencies. So, after a game show scandal, a permanent change took place. Ad agencies got out of show biz, the stations produced their own programming and selling ads went into magazine format.

Forward to today, and we may very well say that the ad agencies are back into show biz. Just look at some of these huge production commercials. The price of making them that has gotten totally out of hand. And to add insult to our economy, ad agencies now ship their productions overseas. Ads that might look like a typical Southern California home or the hills of West Texas are now being shot in Cape Town, Prague, and New Zealand. Credit the strong dollar and a couple of actor unions that went on strike two years ago. The strike ended long ago, but ad agencies never came back. Sounds a little like the steel industry. But in this case, every state is getting hurt. For KERA Marketplace Middays, I'm Maxine Shapiro.

Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.