If broadcasters stay bullish in the upfront, marketers may look for alternatives—and some of those ad dollars could be diverted to syndicated programming.
While syndicators are looking to trumpet the value of their product, they have less inventory to sell in the upfront than do broadcast or cable networks and are therefore unable to take a real leadership position, media buyers say.
“Over time, syndication has benefited from being a value proposition,” said Amy McMahon, associate activation director of media buyer Starcom USA.
If the broadcasters try to keep prices high, “It may direct people to syndication,” she added.
Nevertheless, with the weak economy, buyers are expecting upfront ad revenues for the broadcasters, cable networks and syndicators to be smaller than last year. And there will be pressure from the buyers to roll back pricing.
That means it’s likely that the syndicators, who traditionally sell the bulk of their advertising during the upfront, will be doing more business in scatter this time around, one buyer said.
To some degree, that’s already taking place because some advertisers canceled last year’s upfront commitments.
“We’ve been writing scatter business, and are continuing to write scatter business,” said Bo Argentino, NBC Universal Domestic Television’s senior VP of advertising and media sales.
Ms. Argentino said it’s no surprise that an unusually high number of buyers opted out of their 2008 upfront commitments during the second quarter.
“Anyone that’s telling you that they didn’t have significant options, I think, is either exaggerating or the rare exception,” she said.
However, Ms. Argentino said that NBC had zero difficulties selling in the second quarter.
Companies that purchase advertising time from broadcasters during the upfront period are allowed to give back some of the time, but generally must notify the broadcaster 90 days before the start of a new quarter.
On Par
Media buyers are fairly confident that a similar number of advertisers will exercise their option in the third quarter as did in the second quarter.
As for the coming upfront, the struggling economy continues to force gyrating budgets, and marketers and buyers may wait longer and longer to lock in their advertising dollars.
“In the last down market, syndication didn’t get done until roughly August or September,” Ms. McMahon said.
“The recession has got everyone slowing down a little bit,” Ms. Argentino said. “Agencies and clients are spending a little bit more time preparing and getting comfortable with what they are preparing to commit.”
NBC’s newest property in broadcast syndication, “The Office,” as well as Twentieth Television’s “My Name Is Earl” and Sony Pictures Television’s first-run “The Dr. Oz Show,” are garnering interest in the syndication community, Ms. McMahon said.
“I think there’s a lot of hope for ‘Dr. Oz.’ Certainly he’s got a good pedigree with his relationship with Oprah and the fact that it’s being co-produced with Harpo,” Ms. McMahon said.
Syndication is showing off its integration chops this go-round, as the quality and amount of creative in-show branding has grown significantly in the past few years, Ms. McMahon added.
Howard Levy, executive VP of advertising sales for Disney-ABC Domestic Television, said “Live With Regis and Kelly’s” 2008 “High Heel-a-thon,” sponsored by Dr. Scholl’s, wouldn’t have been possible a few years ago.
The cost for the insurance alone, plus the additional cost of setting up an outdoor shoot for a race in high heels, would have been too much for the show to produce by itself.
Remaining Upbeat
Even with all the success, syndicators are optimistic that ad dollars will at least break even with last year, although buyers aren’t as convinced.
One buyer said syndication is going to take its advertising lumps just like the rest of the industry.
The sellers, on the other hand, wouldn’t talk specifics on how they expect this year’s upfront to finish, saying it’s too soon to tell.