Execs Report Scatter ads showing improvement in Q2

Apr 18, 2005  •  Post A Comment

Television sales executives said national TV scatter advertising sales for the second quarter are picking up some steam-but media buyers caution it may just be hot air.

Program prices for network and cable television programs improved to the same levels as upfront prices set in May/June 2004, said media agency executives. That’s good news, considering that in the fourth quarter 2004 and the first quarter 2005 deals for programs were 5 percent to 10 percent below that of upfront deals.

“We have seen in the last three weeks some of the strongest weeks [of the season] across the board,” said Mel Berning, executive VP of advertising sales for A&E Networks. “There is a lot of life all of a sudden. There seems to be some underlying strength in the market.”

In recent weeks, Mr. Berning said, strong sales have come from categories such as entertainment, gaming, pharmaceutical, travel, automotive, cosmetics/hair care, beverages and financial services. He said major retailing chains are still somewhat lagging. Additionally, he added, advertisers who exercised options to drop earlier upfront deals are now back in the market buying inventory.

Similar positive activity at the broadcast networks as well as at USA, TNT, TBS, Sci Fi and National Geographic is being reported by media buyers. A cable sales executive said: “A few cable networks are pretty close to being sold out.” One broadcast network sales executive was cautious: “Business is coming in late. Advertisers are buying close to their airdates.”

Take all of this with a couple of grains of salt, said media agency executives. “It’s still weak-compared to traditional second quarter history,” said one veteran media agency executive. Short-term, quarter-by-quarter national TV advertising deals are also referred to as “scatter” market buying.

In a more traditional upfront-scatter broadcast season, scatter pricing would be at 10 percent above upfront levels and deals would be made some six weeks in advance of a specific quarterly sales period. That isn’t the case for the second quarter 2005 period. Deals have been made during the period and program prices are only at the same levels as upfront deals made last summer.

“It’s uptick, but not a super-strong market,” said Doug Seay, senior VP of national broadcast at Publicis & Hal Riney. Media buyers anticipate TV sellers will use this positive sign as leverage when the big upfront advertising sales market commences next month. TV sales executives want to position themselves as the strongest just before the upfront begins.

Second-quarter activity typically is a harbinger of how the market will perform in the upfront. In last year’s upfront market, broadcast cost-per-thousand-viewer price increases ranged from 5 percent at ABC to 10 percent at CBS, with other broadcast networks seeing average 7 percent gains.

Early estimates are that ABC and Fox will join CBS in looking for 10 percent gains in this upfront. NBC, because of its lower ratings this season, will no doubt take a hit, eking out only small single-digit increases, media agency executives said.

“I don’t know if the second-quarter scatter activities are a sign of growing upfront budgets,” said Tim Spengler, executive VP of national broadcast for Initiative Media, New York.

Executives at ABC and NBC had no comment. Spokespeople for CBS, Fox, The WB and UPN did not return phone calls.