Reality Check: Upfront Upside

Apr 21, 2003  •  Post A Comment

With war concerns abating, the strong TV advertising market looks to continue as media executives expect a moderately healthy upfront market.
Overall, the upfront is expected to see at least a 5 percent rise to $8.55 billion in overall revenue from the $8.1 billion prime-time upfront market last year, according to an informal survey of media buyers. More optimistic media sellers predict a bigger gain to $9 billion. Some time ago, Mel Karmazin, president and chief operating officer of Viacom, said the upfront could rise 15 percent-putting the market at more than $9 billion.
One new wrinkle in this year’s upfront is a stable supply of key adults 18 to 49 gross ratings points-down 0.5 percent vs. a year ago. In the past decade, prime-time network ratings eroded at a 4 percent to 5 percent rate per year as viewers turned to cable and other outlets.
The outlook is even better when comparing similar programming last season and this season. Taking out NBC’s Salt Lake City Olympics broadcasts in February 2002, which boosted 18 to 49 viewership, the results come out even year to year. Collectively, the seven broadcast networks pulled in a Nielsen Media Research 53 share through April 7, the same as a season ago. In the 2000-01 season the seven networks share was 56.
New reality shows are the reason for the slowdown in erosion. Shows such as CBS’s Survivor, Fox’s American Idol and ABC’s The Bachelor spiked ratings for their respective networks. Even second-tier-rated reality shows are helping, such as CBS’s Amazing Race and NBC’s Fear Factor.
“Reality shows have a lot to do with it, “ said Brad Adgate, senior VP, director of audience research, at Horizon Media, New York. “It fits that demographic [adults 18 to 49] profile. That’s part of the appeal of it.”
Still, media-agency executives say these stable 18 to 49 numbers need to be examined more closely. “There is some underlying erosion with dramas and comedies, probably about 4 percent to 5 percent per year,” said Rino Scanzoni, president, national broadcast, for WPP Group’s Mediaedge:cia, New York.
For years, marketers and media executives have bemoaned network-audience erosion. Network executives feel they’ve found a way to stem losses, but say ad executives still aren’t happy.
That’s because ad executives feel reality shows aren’t of the same quality as scripted dramas or comedies. “We are all looking for more ratings points,” said Mel Berning, president, national broadcast, for Publicis Groupe’s MediaVest Worldwide, New York. “I’d be lying in saying these are saleable ratings points.” For example, some of the edgier reality shows deliver 18- to 49-year-old viewers, but certain advertisers shy away from their risque content.
Agency executives are happy that much of the early program development by the networks for next year had a full complement of scripted series. But many don’t believe all will make it if they deliver tepid ratings. The networks have planned a plethora of reality shows just in case.
“If you see what is going on this summer, there is going to be a ton of reality shows,” Horizon Media’s Mr. Adgate said. “I’ll bet you these entertainment shows, if they don’t meet expectations, will be replaced by these reality shows by the November sweeps.”
Media-agency executives say there’s no guarantee of a strong upfront, even though current near-term second-quarter deals have seen prices rise 40 percent or higher compared with last year.
“A lot of growth is already built in,” MediaVest’s Berning said. “Next year’s growth? Prime time? A couple of points increase at best.”
Tim Spengler, executive VP, director of national broadcast, for Interpublic Group of Cos.’ Initiative Media, New York, agreed. He doesn’t expect increases from automotive, pharmaceutical, retail or fast food, though entertainment, especially movies and home video, will likely increase.