News Articles

The path to recovery

Robust scatter market, halo effect of Olympics might mean better year 1/13/2002 07:00:00 PM Eastern

Mike Shaw, ABC

Mike Shaw, ABC

Get to the planners and get to them early. That's going to be a big part of ABC's sales strategy in 2002, says President of Sales Mike Shaw.

And, while the pitch will certainly be "Buy ABC," it will also be broader than that, selling planners on the benefits of network television vs. other media.

In effect, what Shaw believes each of the networks has to do is act as its own ad-sales trade organization. "Cable has the CAB, and syndication has the SNTA. We don't have someone out there singing our story."

It's a story many advertisers and their planners "take for granted." For example, he said, "if you're selling syndication or cable, every sales call begins or ends with someone asking to see your clearances. That never happens at ABC. We're in 99% of the homes on branded TV stations with branded programming. There's no more powerful distribution put out there by man. But we've allowed advertisers to take it for granted."

Cross-platform sales are going to have a bigger impact in 2002 than ever before as well, he predicts. And those sales should help tighten upfront inventory: "From a strictly mathematical standpoint, they will hopefully drive my [upfront] demand."

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.

Forecast
Prognosticator Prediction
CBS +6%
Universal McCann +3.5%
Sanford Bernstein flat
Morgan Stanley -3% to -4%

Mike Shaw, ABC

Mike Shaw, ABC

Get to the planners and get to them early. That's going to be a big part of ABC's sales strategy in 2002, says President of Sales Mike Shaw.

And, while the pitch will certainly be "Buy ABC," it will also be broader than that, selling planners on the benefits of network television vs. other media.

In effect, what Shaw believes each of the networks has to do is act as its own ad-sales trade organization. "Cable has the CAB, and syndication has the SNTA. We don't have someone out there singing our story."

It's a story many advertisers and their planners "take for granted." For example, he said, "if you're selling syndication or cable, every sales call begins or ends with someone asking to see your clearances. That never happens at ABC. We're in 99% of the homes on branded TV stations with branded programming. There's no more powerful distribution put out there by man. But we've allowed advertisers to take it for granted."

Cross-platform sales are going to have a bigger impact in 2002 than ever before as well, he predicts. And those sales should help tighten upfront inventory: "From a strictly mathematical standpoint, they will hopefully drive my [upfront] demand."

March