Are Detroit advertisers getting ripped off by TV?

A ratings decline of 24 percent for local newscasts over the last ten years on Detroit’s television stations haven’t stopped ad rates for those newscasts from escalating, according to Crain’s Detroit Business.

Ratings are down for the early-fringe and 11 p.m. newscasts on the market’s three stations that does late news: Fox owned-WJBK-TV, Post-Newsweek’s NBC affiliate WDIV, and Scripps’ ABC affiliate WXYZ-TV. WXYZ leads at 5 and 6 p.m., while WDIV, despite weak NBC lead-ins, leads at 11 p.m.

WJBK, which was a CBS affiliate until December 1994, traditionally lags both competitors. The station plans to launch an 11 p.m. newscast in September (According to historians, WJBK ‘s news as a CBS affiliate finished not only behind WDIV and WXYZ in the ratings, but also syndicated fare such as reruns of The Jetsons.)

The current CBS affiliate, O&O WWJ-TV, does not do news. The station ended its low-rated newscasts in 2002.

WDIV has experienced the greatest loss of all three 11p.m. newscast over the last decade, thanks partly to the decline of NBC’s primetime schedule. In 1997, NBC was the top-rated broadcast network. Today, it’s ranked fourth. (WDIV is still No. 1 at 11, though.)

Another factor is the explosion of cable channels, and a change of Nielsen’s measuring of the ratings itself, according to Steve Wasserman, WDIV’s general manager.

Detroit became a Local People Meter (LPM) market last year, which replaces diaries with more accurate electronic measuring equipment.

Despite the ratings decline, a loss of an competitor, and the continued splintering of the audience (with viewers heading for cable and the Internet for news), ad rates has risen for those news programs, thanks in part to advertisers’ desire to be in local news and their willingness to pay a premium for certain demographics (i.e. the adult 25-54 audience) that is usually not available elsewhere.

Another reason some advertisers like local news is because it attracts viewers that normally don’t watch the networks’ younger-skewing primetime fare, which includes the upper end of the 18-49 demographic, and much of the 50+ crowd.

With political spending expected to hit a fever pitch next year, local news stations are in for a windfall, with spots going up thanks to a crunch in available slots. Politicians love local newscasts because the audience watching them are the ones that are most likely to vote.

But advertisers now have to spend more money to reach the same viewers they did ten years ago. That means advertising on cable and in other news dayparts.

So are advertisers getting ripped off? If the demand is there and they are willing to pay a premium, then the answer is no.