The path to recovery
Robust scatter market, halo effect of Olympics might mean better year
By Steve McClellan -- Broadcasting & Cable, 1/13/2002 7:00:00 PM
With luck, the broadcast networks won't lose any more ground this year than they lost in 2001. But some prognosticators aren't so sure.
A couple factors are working in the networks' favor. The scatter market remains solid, with both CBS and NBC logging record fourth-quarter scatter markets, in dollar volume if not pricing. And some take the current advertiser demand for scatter as a sign that the economy will improve this year.
The big questions are how soon and how strong the economy will recover and when that will translate to a full ad-market recovery.
In 2001, for the first time in a decade, broadcast-network advertising sales declined from the previous year. The final tallies aren't in yet, but most estimates have network off by 3%-4%. Universal McCann estimates the decline at 3.5%, to $15.5 billion, for the Big Four.
But different factors are affecting 2002. NBC is the direct beneficiary of the Salt Lake Olympics in February. It's also a political year, although most of that money goes to national spot. But both the Olympics and the political dollars could provide a residual benefit for all the networks by tightening the amount of available inventory. Whether or not demand emerges to boost prices (and to what extent) remains to be seen.
Another positive sign: The number of options being exercised by advertisers to cancel upfront buys for the first quarter is way down from a year ago.
While many don't expect a recovery before the second half of 2002, CBS President of Ad Sales Joe Abruzzese is more optimistic. "I see it recovering a lot quicker," he said. He's hopeful the Olympics will give the network marketplace the initial kick-start toward recovery.
"The Olympics will have a real big impact on the recovery," he said. That was his experience with the '92 Albertville games on CBS, which helped boost the network economy after the recession of 1991.
Others aren't as optimistic. "The are no indications that the general economy is about to stage a recovery, and prospects for a first-quarter rebound are highly unlikely," sais Jack Myers, the New York-based marketing consultant and publisher of The Jack Myers Report.
He predicts the networks will be down another 4% in 2002. One reason: He believes the auto industry will pay for its 0%-financing campaign by reducing ad/marketing budgets at least through 2004.
The spring upfront market should tell the story. "I'm glad it's not happening now," said Abruzzese.
| Prognosticator | Prediction |
|---|---|
| CBS | +6% |
| Universal McCann | +3.5% |
| Sanford Bernstein | flat |
| Morgan Stanley | -3% to -4% |
No related content found.
-
No Top Articles
Featured Company
-
Digital Rapids
Digital Rapids provides market-leading software and hardware solutions, technology and expertise for transforming live and on-demand video to reach wider audiences on the latest viewing platforms more efficiently, more effectively and more profitably. Empowering applications from..more
VIEW ALL GALLERIES
