Logo

This Year’s Upfront Take Likely to Be Down

May 1, 2008  •  Post A Comment

With a faltering economy chief in many marketers’ minds, the total dollars committed in this year’s broadcast-TV upfront could be flat to down, several media executives said today.
Speaking at a conference hosted by TVWeek and Advertising Age, media buyers and network executives described a climate of caution and concern, owing to fears the U.S. economy has moved into a recession, as well as massive shifts in technology that allow consumers to get entertainment and information in places other than the five big broadcast outlets.
While marketers are still considering budgets, “There’s no doubt we are in the middle of the recession, and the upfront might be affected,” said Geri Wang, senior VP-president of prime-time sales at ABC.
One media buyer was even more direct: “From the numbers perspective, it’s challenging to see a flat or positive upfront. I don’t think that’s going to happen. I think it will be down,” said Kris Magel, exec VP at Interpublic Group of Cos.’ Initiative, where he oversees national TV buying.
Tight scatter market
That talk sets up an intriguing marketplace as advertisers decide how much of their ad budgets to commit to TV overall. Because of ratings erosion — some of it exacerbated by the recent writers strike — TV networks are seeing diminishing reach and must run clients’ ads more frequently in order to get those commercials in front of the same number of people as in years past. Tight supply has made so-called scatter advertising, or ads bought as needed rather than during the upfront, very pricey. In a recent conference call with investors, CBS CEO Les Moonves said, “Network pricing in the scatter market continues to be up double digits.”
Tight scatter usually augurs a robust upfront market, when advertisers commit between $9 billion and $9.5 billion to the fall prime-time lineups of the major broadcast networks. That’s what helped the total for upfront commitments for the 2007-08 season rise to about $9.19 billion, up from a relatively lackluster $8.95 billion for the previous season. Cable came in at around $6.9 billion, up at least 6% from a $6.5 billion take in the previous year. Syndication came in at about $2.06 billion.
This year, however, the economy may throw a wrench into that tried-and-true formula. Some marketers may be forced to cut back on what they spend in this year’s upfront, said Linda Yaccarino, exec VP-general manager, Turner Entertainment Sales and Marketing. Others may take advantage of competitor cutbacks and increase budgets. But overall, she said, marketers likely will “take a much more thoughtful approach.”
Other hurdles
Broadcast networks face other hurdles as well. Due to the writers strike, they won’t have as much new programming to introduce immediately in the fall. There is also concern among buyers that more reality programming could hurt the medium in the long term, as viewers tune in for short-lived game shows and tabloid contests but see less of the scripted fare that keeps them hooked for years. Cable also has gained ratings share, according to analysts, and Turner has said it wants to increase its supply of original programming.

6 Comments

  1. Nicely said.

  2. Great wordpress blog here.. It’s hard to find quality writing like yours these days. I really appreciate people like you! take care and see you soon

  3. Hey how are you doing? I just wanted to stop by and say that it’s been a pleasure reading your blog. I have bookmarked your website so that I can come back & read more in the future as well. plz do keep up the quality writing

  4. Love the blog here. Nice colors. I am definitely staying tuned to this one. Hope to see more.

  5. Way to focus and straight to your point, i love it. Keep up the work people. Dont let anyone stop us bloggers.

  6. Just desired to say th is blog site is in my best blog site l ist on #46.

Your Comment

Email (will not be published)