As Broadcast Talks Negative CPMs, Cable Moves To Lead Upfront

With the September television season looming larger each week, upfront brinkmanship may be reaching its zenith.The broadcast networks have come around to discussing small negative CPM rollbacks of a point or two. Still, the incremental concessions don’t appear to be enough to get the market started–even though the differential between the networks’ one- or two-point rollbacks and the agencies’ desires for something close to the mid single digits is as little as three points.

One senior buyer, who did not wish to be named, said: “The gap isn’t as wide, but we still have a delta we need to close. It starts on broadcast; cable guys are trying to quietly move something forward.”

Cue the cablers: Fed up of waiting for the broadcast networks to define the marketplace, cable sales executives are now pulling out all the stops to jolt the market. One TV buyer said that cable was very close to breaking open the market-now eight weeks after the broadcast programming presentations were made and much longer since cable channels unveiled their own wares.

Today, the Cabletelevision Advertising Bureau (CAB) made a renewed pitch to marketers, procurement units and ad agencies in a letter aiming to swing more TV ad dollars to their side. The letter, obtained by B&C, reads: “If advertisers want to end this stalemate, they can buy cable first, shift another 15% of their budgets into cable and realize the kind of price/value they need in this year’s upfront marketplace.” (Click here to read the full letter from CAB.)

That is not to say that cable will take deeper CPM cuts than broadcast (though some cablers will). CAB is simply reinforcing the cable industry mantra that it offers better value.

The letter goes on to argue that cable’s price/value equation “has always been the most effective remedy for unrealistic broadcast pricing.” The pitch argues that the stalled market is “largely due to broadcast networks’ refusal to lower their CPMs in any meaningful way despite their worst year on record for ratings performance,” adding that on the buy side, agencies have stopped “buying into the illusion of scarcity.”

“If the broadcast networks are dug in and don’t want to move off negative two, three or four, the market has to proceed,” a senior cable industry executive said. “And if there are agencies out there that are still under pressure to deliver double-digit CPMs, then it makes sense to do cable first.”

This person suggested that no-one in the TV universe could achieve even as much as a flat CPM in this market, adding, “I don’t think anyone is writing anything at a -2.”

Gary Carr, senior vice president, executive director, TargetCast TCM, said: “I’m frankly surprised that after all this time the gap between the two sides is as wide as it is. I’m surprised nothing’s given yet. Who knows: maybe this is the year we do it all in scatter. I doubt that, but it’s July 16, we’re a month and half away from September.”

Cable channels and syndicators aren’t the only ones making a play for the national TV ad pie. Hispanic language players and local stations remain focused on making their case heard.

Gary Belis, a spokesman for the Television Bureau of Advertising (TVB), said, “TVB has been pushing hard the idea that buying local spot, now because of the CPM trends is now thinkable for people who are only buying national .”

According to the TVB website, an average primetime CPM in the local spot market was $27.29 in 2008, compared to network at $26.22. While the spot price is still higher than a national broadcast buy, the price of local ad spots is expected to drop further in 2009 in line with the tough ad environment.