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Network ad market shows signs of life

Oct 29, 2001  •  Post A Comment

Despite the scares and the fears of recent weeks, both ad sellers and ad buyers are surprisingly upbeat about the near-term future. But that may be partly because the upfront was so downbeat that, for networks and agencies alike, there seems to be nowhere to go but up.
“The scatter market’s been pretty good,” said Paul Schulman, president of the New York office of Advanswers PHD. “I don’t think the networks are doing too badly. They are pretty much able to keep the integrity of the upfront pricing for the better shows.”
Then there is Sept. 11 and its continuing aftermath. The terrorist attacks, coming as they did at the very end of the toughest upfront in a decade, have left the ad players “drained, drawn out,” said Gig Barton, Court TV’s executive vice president for ad sales.
“We closed some upfronts post-9/11,” Mr. Barton said. “People are still negotiating hard, but there seems to be a lack of an edge to it.”
The result, according to Mr. Barton and others, has been an “outpouring of accommodation. … No one who had committed to dollars on Court TV prior to 9/11 has reneged on any of their deals. That’s extraordinary.”
One unexpected aftereffect of the week of Sept. 11, when schedules were pre-empted and networks went commercial-free, has been to tighten available fourth-quarter inventories. Commercials that were “displaced” by the commercial-free programming “sucked up” excess inventory in the fourth quarter, as one sales executive put it.
But whether the near-term ad-dollar goodie bag is half-full or half-empty depends on who is looking. According to several sellers, fourth-quarter scatter costs per thousand have held at or above upfront prices at most broadcast and cable networks. That augurs well for first quarter.
At ABC, for example, fourth-quarter CPMs have come in with single-digit increases “above upfront,” said Mike Shaw, president of sales and marketing for the ABC Television Network. With poor ratings performance, however, ABC’s inventory has tightened considerably because of make-goods.
Mel Karmazin, Viacom’s president and chief operating officer, said last week that there has been no discounting from upfront prices in fourth-quarter spot sales in any dayparts. He also said that fourth-quarter prime-time revenue should be up double digits and that the company’s overall fourth-quarter revenues will increase.
One senior ad agency executive, however, said he had done two fourth-quarter scatter deals at CBS for below-upfront CPMs.
Said a CBS spokesman: “If you have Mel saying something on one side, with his name and all that, and you have unnamed buyers on the other side, what could I possibly do? Am I going to try and expand on Mel’s comments? … There’s not much I can possibly say to you.” The spokesman declined to address the issue further.
NBC’s fourth-quarter scatter, led by a revitalized “Friends,” has been close to upfront prices, the agency executive said, adding that ad-supported cable was so steeply discounted in the upfront that it had nowhere to go but up in the fourth quarter.
Court TV, for example, had its best fourth quarter in history, Mr. Barton said. Fourth-quarter scatter prices at the Turner ad-supported cable networks also are “holding” in relation to the upfront, a Turner Broadcasting Sales spokesman said. Furthermore, “To date, the number of cancellation options being exercised is running behind our experience from last year,” the spokesman said.
There was general agreement, though, that the ad flights have been shorter than usual-just three or four weeks instead of eight-and that the orders were coming in ever closer to airdate. For example, an agency might not place an order until the Friday before the Monday a flight is set to start. That is because advertisers are more tightly controlling the flow of money to agencies, and agencies are shopping around until the last minute, looking for the best deal.#
-Diane Mermigas contributed to this report