Scatter Looking Promising at ABC

Jul 10, 2006  •  Post A Comment

After ad buyers held the broadcasters to small increases in the upfront, Mike Shaw, president of ABC Television Network sales and marketing, is looking for bigger things in the scatter market.

“We like where we are now heading into next year,” Mr. Shaw said last week. “There’s going to be a pretty decent scatter market in prime time that will develop now.”

Last week, ABC was the last of the major broadcast networks to declare that it was done with its upfront sales. Expected to be the leader in setting the course of the market, Mr. Shaw was twice stalled. ABC sales first ground to a halt when he held out to have shows viewed on a delayed basis included in ratings he guarantees advertisers. Sales stopped again when he dug in his heels seeking larger price increases than the market would bear.

While some buyers and rivals suggested the tactics might have cost ABC some ad commitments, Mr. Shaw insisted, “We didn’t lose one dime. Not a penny moved.”

ABC said it sold about $3 billion worth of time in the upfront. Its prime-time sales were about $2.3 billion, including new college football games on Saturday nights in the fall. The network’s prime-time take is up from $2.1 billion last year.

While buyers said their clients paid price increases of 1 percent to 2 percent on a cost-per-thousand-viewers basis, ABC said its effective CPM increase was in the 3 percent to 4 percent range because the network attracted more spending by advertisers willing to pay premium rates for Thursday nights and upscale audiences.

“We were still able to get a good increase, if not a great increase,” Mr. Shaw said.

Fox also showed a healthy gain in the upfront, gaining in both volume and pricing. CBS’s sales were flat and NBC, boosted by football, was able to keep its upfront sales roughly where they were last year despite getting prices that were 5 percent to 7 percent lower. The CW rang up sales similar to what The WB did last year. MyNetworkTV is still working to complete deals, but is not expected to be anywhere close to the $250 million UPN sold in last year’s upfront.

Mr. Shaw said that as far as he could tell, spending was down only in prime time.

“You look at daytime, early morning, evening news and late-night, we don’t see the money down, so that either suggests that all other dayparts are really healthy and money’s moved to them, or that some people held back money in prime time,” he said.

But buyers said there was slightly less money in this year’s upfront and the lowered demand helped rein in prices.

“Ad demand is what drives pricing and the demand this year in the upfront was clearly down, and that impacted pricing,” said Steve Grubbs, CEO of media agency PHD. “The overall media mix is being reallocated and clearly more spending is going against the online and other emerging media.”

‘Buyer’s Market’

Even if some money was held back to take advantage of digital and other marketing opportunities, buyers didn’t think there was any reason to expect the scatter market to boom.

“It’s continuing to be a buyer’s market,” one senior buyer said.

After ABC made two groundbreaking changes for the TV industry — selling some of its shows via Apple Computer’s iTunes Music Store and making some of its shows available online via ABC.com — Mr. Shaw said he held most of his digital opportunities out of the upfront.

He said ABC only recently concluded its online test and is now analyzing the data. He said parent company The Walt Disney Co. is in the process of doing video-on-demand deals with cable operators as well.

“We want to get it right. We want the advertising experience to be as robust and positive for advertisers as possible,” he said. “I like the idea that the other guys are sold out of their opportunities and we have all of ours. That’s a good place for us to be in with scatter.”

Another piece of technology Mr. Shaw thinks will benefit ABC and the other broadcast networks is high-definition, now that set sales have reached what he called a tipping point.

“It’s a huge factor. What you’re finding in the HD homes is they watch television differently. Their top 10 channels that they go to first to watch are their HD channels,” he said.

With the networks already broadcasting their prime-time shows in HD and converting other programming, including news, “You’re talking about a huge game changer that has already taken effect,” he said, predicting that network shares will go up next season in prime time.

Meanwhile, buyers said they hope to begin wrapping up a significant number of cable and syndication deals this week.