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Advertisers Planning to Stick With TV

Oct 28, 2007  •  Post A Comment

A writers strike would cost the broadcast television networks some ad revenue, but it won’t send sponsors running.
With the ad market extremely strong right now, the extent of the damage caused by a strike will depend on how long it lasts and how well replacement programming performs.
“It’s not like we can just pull money out of television,” said Andy Donchin, director of national broadcast at Carat. “Will some money come out? Possibly. Will we work with the networks to figure it out? Absolutely.”
After a strong upfront, the fourth-quarter scatter market is very tight, with ad prices on a cost-per-thousand viewers (CPM) basis jumping by double digits, according to media executives.
Surprisingly, Mr. Donchin said some first-quarter 2008 deals are already being made, weeks earlier than usual.
“I think it behooves everyone to get in sooner rather than later,” he said, ascribing the market’s tightness to supply issues caused by “less than stellar ratings on some programs we thought would do better.”
Over at Initiative Media, given market conditions, the media agency is telling clients it might not be wise to pull back ad dollars from television in the event of a strike.
“Due to the tightness in the market, the networks will not have the ability of re-expressing preempted dollars to other programs,” Initiative said last week in a memo to clients. “Therefore, advertisers will be given the choice of staying in the new program or taking the dollars back. As all national television is extremely tight or sold out, pulling dollars would not be advisable.”
When advertisers commit to buy advertising in the upfront market, they have the option not to purchase some of the ad time they’ve reserved. In the scatter market, where ad time is bought closer to when the spots air, advertisers usually don’t have that option.
Technically that option isn’t available in scatter, Mr. Donchin said, “but in the situation of a strike, then all bets are off, and if you can’t be in the shows that you purchased, then that has to be addressed.”
In its memo, Initiative said a strike would bring the production of scripted programs “to a screeching halt” and affect daytime programming and late night talk shows. Shows set to start their runs in early 2008, such as “24” and “Lost,” would be delayed and the pilot season would be affected, the memo said.
“These developments would clearly impact the ratings that the network programming would deliver to our buys,” Initiative said in the memo. “We would estimate that original programs could air into the holidays and on some networks into January.”
Replacements for scripted shows would include reality and game shows, British shows and reruns, according to the memo.
“In sum, it could look like summer programming in winter,” the Initiative memo said.

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