Coen forecast: broadcast upward, but cable down

Jul 15, 2002  •  Post A Comment

If Robert Coen, the dean of agency ad-spending prognosticators is right, advertising-supported cable is in for a rough ride this year, while the rest of ad-supported television will continue its climb out of the 2001 slump.
Specifically, Mr. Coen, senior VP, director of forecasting, Universal McCann, whose midyear forecasts generally have been the standard against which other prognostications are measured, predicted that for 2002 the Big 4 broadcast networks will be up 7 percent over 2001, together taking in $15.3 billion; that spot TV will be up 7.5 percent, taking in just over $9.9 billion; that local TV will be up 5 percent, to more than $12.8 billion; and that syndication will be up 0.5 percent, taking in nearly $3.9 billion.
Of the various TV sectors, only ad-supported cable, in Mr. Coen’s forecast, will fall in 2002, dropping 3.5 percent to just under $11.5 billion.
The Cabletelevision Advertising Bureau disagreed with Mr. Coen’s assessment. “CAB anticipates a modest increase over last year,” a spokesman said, “with expectations of an even better 2003.”
Mr. Coen, on the other hand, saw cable as being in a “rather vulnerable position right now.” The reasons he cited are cable’s former reliance on dot-com advertisers and the phenomenon of cable cannibalization. There has been a plethora of new cable networks coming into the marketplace since 1990, Mr. Coen said, and they all have their own sales forces, which are “taking their business away from the old [cable networks].”
Mr. Coen suggested that neither the well-known price differential between broadcast and cable nor cable’s increasing share of audience relative to broadcast was in cable’s favor.
Cable’s “price appeal is even being diminished … by the broadcasters’ offering more attractive deals,” he said. Cable “can have share of audience. If you buy 40 or 50 cables, you can get the same share of audience as two or three [broadcast] networks … and they did get business on that basis. Maybe they’ve reached the point where [cable] becomes more like a radio medium.”
Looking back at cable’s first-quarter 2002 ad-revenue drop, he pegged it down 13.8 percent from the same quarter in 2001. By comparison, for the first quarter, the Big 4 broadcast networks in aggregate and spot were up 7 percent and 5.5 percent, respectively, while syndication was down 8.9 percent from the same quarter in 2001, Mr. Coen said.
Mr. Coen’s assessment of cable’s immediate prospects are considerably more bearish than some other recent estimates. For example, CMR, at the recent AdWatch 2002 conference, which it co-sponsored with Advertising Age (Electronic Media’s sister publication) and UBS Warburg, pegged cable’s 2002 drop at just 0.3 percent.
Aside from cable’s arguable obstacles, and other TV advertising sectors’ relatively modest gains-after 2001’s “record decline” in overall advertising activity-it is now “fairly evident that we’re in the recovery,” Mr. Coen said. The outlook for advertising overall is for “modest but positive growth” through 2002, and for 2003 the early projection is for a “beginning of better advertising trends.”
One of those trends is likely to involve new product introductions, which were “pent up” during the recent slump; another may involve those much-maligned dot-com advertisers, who may just now be starting their return as a significant advertising category in traditional media.
Mr. Coen also tabulated top product-category changes in the first quarter of 2002, compared with last year, for both the seven broadcast networks and spot TV. They are automobiles (up 6 percent for the seven networks and up 8 percent for spot), food (down 4 percent and down 25 percent, respectively, for the seven networks and for spot), movies (up 23 percent for the networks, but down 5 percent for spot), toiletries and cosmetics (up 1 percent for the networks and 12 percent for spot), drugs and remedies (down 12 percent for the networks and down 20 percent for spot), beverages and snacks (up 6 percent in both categories) and restaurants (up 14 percent for the seven networks and 3 percent for spot TV).