Local stations can’t predict ad recovery

Oct 15, 2001  •  Post A Comment

There are as many projections about what the fourth quarter may bring in new advertising revenue as there are local television stations.
The outlook, which had been bleak before Sept. 11 and then turned grim with the widespread disruption of advertising after the attacks on the World Trade Center and the Pentagon, has improved now to mixed as station executives try to divine the true state and direction of the economy.
“If you had trouble predicting it before the 11th, boy, how could you predict it now?” said Jeff Smulyan, chairman and CEO of Emmis Communications.
“Advertisers are so uncertain about what their future is that they really haven’t decided what’s going to happen to our future,” said Tony Vinciquerra, executive VP and chief operating officer of Hearst-Argyle Television.
If there is a theme to forecasts (and prayers) at the station level, it’s that local business will be stronger than national business.
“We just naturally expect local to be better. It’s been our strength throughout the year,” said Bruce Baker, executive VP of Cox Broadcasting.
Marty Ozer, the VP and general manager of two Cox-owned stations in Reno, Nev.-UPN affiliate KAME-TV and Fox affiliate KRXI-TV-feels lucky to be able to say that while national advertising is off year to year, “Our local business is flat,” thanks to a couple of factors, including a sales staff going after “every business that’s in the Yellow Pages and the newspaper.”
“We’ve just had one cutback, from a casino, and it was because they were very nervous,” Mr. Ozer said.
Something else was helping stave off local revenue erosion: Barry Bonds’ drive toward the single-season home run record set three years ago by Mark McGwire. KAME carries Giants baseball games, Mr. Ozer said, and, “Advertisers want to be in those telecasts.”
“We’re an aberration,” said Mr. Ozer, who added that while the station has not had to lay anyone off, a couple of positions have gone unfilled.
In St. Louis, Tom Tipton, general manager of KDNL-TV, the Sinclair-owned ABC affiliate that shuttered its two newscasts and laid off nearly 50 newsroom employees effective Oct. 12, said pending programming changes made it particularly difficult to project what fourth-quarter business the station might write.
But he said he expects the local market to be down “probably 10 points” compared with fourth quarter 2000, when about $20 million in political money was being spent.
“That’s a lot to make up,” Mr. Tipton said.
Some station groups won’t be writing the small amount of annual business they do until nearer the end of the year, but they’re banking on automakers and dealers to spend what one station-group executive was expecting to be “significant amounts of dollars.”
In Bangor, Maine, a small market notable for its plethora of low-power stations and a low level of cable penetration (about 52 percent), James McLeod’s Maine Family Broadcasting owns Pax affiliate WBGR-TV and UPN affiliate WCKD-TV, the latter of which is managed by Rockfleet Broadcasting.
Like station executives in other regions, Mr. McLeod has noticed “that kind of deer-in-a-headlight stare” in his neighborhood. “I guess the word I’d use is `distracted,”’ he said.
Mr. Ozer has weathered tough times before, including numerous recessions, the loss of cigarette advertising and the time in the 1960s when advertisers shifted from 60-second spots to 30-second spots.
“What was interesting is that the advertisers who stayed the course gained share. And when the business came back, they held that share.”
“Clearly, business will get back to normal and advertisers will need to convey their message to consumers,” Mr. Vinciquerra said. “And what better medium than television?”