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Predicting 2001 ad spending a tough call

Most predict small growth over 2000 but say further review may be needed 1/14/2001 07:00:00 PM Eastern

The outlook for 2001 ad spending is more uncertain than it has been for perhaps any year in the past decade. Consumer spending is down, and the Federal Reserve's cut in interest rates two weeks ago bolstered the stock market for a grand total of one day.

"That's the big question," says Bob Cesa, executive vice president, advertising and cable programming sales, Twentieth Television. "Everybody is concerned about where the economy is headed."

Fourth-quarter scatter sales virtually dried up for network, syndication and cable, and the pace of sales for the first quarter isn't much better. But most sales executives say they aren't so concerned about the first quarter, when sales tend to dip after the holiday season.

What they're really concerned about and watching closely is whether advertisers exercise options to get out of second-quarter spending commitments. Those options are coming up in the next month or so.

"I don't see an awful lot changing unless something really disastrous happens," says Robert Coen, senior vice president, Universal McCann, who issued a comprehensive ad forecast early last month. Coen foresees a 6% gain for barter syndication in 2001. In terms of growth, that's substantially better than the 1% growth he forecasts for the Big Four networks though not as good as the 12.5% increase he thinks cable will get.

Veronis Suhler & Associates, the New York-based media investment banker is predicting a 4.2% gain for barter syndication this year, to about $2.54 billion. That's only slightly less than the roughly 4.5% growth Veronis says the syndication ad market registered in both 2000 and 1999.

By comparison, Veronis is predicting (like Coen) 1% growth for network TV and 13.5% growth for cable in 2001.

Veronis issued its projections last July before the downturn in the fourth quarter. Last week, Leo Kivijarv, who oversees the company's forecasts, said that the company still stands by the July numbers but they are subject to review.

VS & A will soon begin the review process, starting with a new internal prediction on whether a much-speculated-on economic recession will actually materialize. Last week, Kivijarv said company economists are "leaning" to the view that there will not be a recession, but he stressed that the company's "official" position on the subject won't come for a week or two.

But if current market conditions persist, this year's upfront negotiations may prove more challenging for sellers. "If it continues to stay soft through March, it will be a lot tougher market," says one longtime syndication buyer. "Whenever there's a soft year in scatter, the agencies go back to the suppliers and say, we're not paying you any more money next year. We'll be looking at flat CPMs or even adjustments [downward]."

Allison Bodenmann, president, Syndicated Network Television Association, believes that 5% growth for syndication advertising is possible this year.

From the ad-buying side, one sign that a wholesale downturn in the ad economy is not in the offing comes from a recent survey of more than 100 ad executives by New York-based Myers Reports Inc. According to the survey, the vast majority of ad executives polled expect their budgets to either increase or remain stable over the next 12 to 18 months.

But if the survey is any indication, the ad market clearly will not be as robust as it was in the past several years. About 40% of those surveyed expect their budgets to be flat in 2001, with another 13% saying they expect a decrease. But 47% of the executives expect their budgets to increase.

Michael Weiden, president, advertising sales, Pearson Television Domestic Syndication, says he hasn't seen much improvement in the first quarter compared with the fourth. "We're seeing a few scatter budgets, but things are still a little bit on the slow side."

And Weiden says there were signs of advertiser concerns as early as last summer, when an unusual number of buyers cut back their buys even before the start of the season.

"Those upfront buys in the spring are on hold until August when the [agencies] get their presentations done and approvals by the clients, even though the client has input on all the holds," he explains. "And there were cutbacks on holds for [the 2000] upfront."

Pearson has renewed Baywatch, Family Feud
and To Tell the Truth
for the next season and is introducing a game show, a redo from the Goodson library, Card Sharks.

The company is also trying to launch two action hours, including the Andrew Dice Clay vehicle, Colosseum. New action hours are getting harder to launch, Weiden observes, because of the resurgence of the off-network-hour market.

Twentieth's Cesa agrees that it's too early to read the upfront tea leaves. "I would just say, in general, the syndication marketplace is a mature marketplace and it reacts very much like the network and cable marketplace.

"We have a lot of good off-network products coming into the marketplace. We had some success in first-run this season with Power of Attorney
, Arrest and Trial
and Andromeda."

Twentieth hasn't given the go on any first-run shows for next year but has five new off-network shows coming to the market: King of the Hill;Buffy, the Vampire Slayer;The Practice; Two Guys and a Girl
and World's Wildest Police Videos.

Meanwhile, the lackluster ad market arrived with a corresponding downturn in ratings for most syndicated shows during the November sweeps. One veteran of the syndication wars says the November book was "the worst I've seen in 15 or 16 years."


Ladies First/Syndicated programming ranked by rating among women 25-54

Cases W 25-54 RTG W 25-54 SHR Change
November 2000 vs. November 1999

Available markets: 215


TALK

Oprah Winfrey

183

4.8

26

-4%

Rosie O'Donnell

115

2.8

18

-5%

Live With Regis

183

2.3

16

-11%

Maury Povich

98

2.1

12

-20%

Jerry Springer

86

2.1

10

-9%

GAMES/RELATIONSHIP STRIPS

Wheel of Fortune

196

4.9

16

-16%

Jeopardy

188

4.0

13

-23%

Hollywood Squares

133

2.6

10

-17%

Blind Date

24

1.5

7

-30%

Family Feud

57

1.2

8

-27%

MAGAZINES

Entertainment Tonight

119

5.1

15

7%

Access Hollywood

33

3.5

9

13%

Inside Edition

62

2.9

11

0%

Extra

78

2.6

8

0%

National Enquirer

27

0.7

4

-43%

REALITY

Judge Judy

140

2.8

12

-20%

Divorce Court

60

1.8

9

-18%

Real TV

40

1.7

6

0%

Judge Joe Brown

93

1.6

10

-17%

People's Court

71

1.3

8

0%

SITCOMS

Friends

168

4.2

10

0%

Seinfeld

159

3.9

11

-8%

Frasier

122

3.5

10

0%

Drew Carey

175

2.6

5

0%

The Nanny

40

2.5

6

0%

WEEKLIES

Stargate

71

1.7

8

0%

Andromeda

226

1.4

5

-17%

Baywatch Hawaii

40

1.3

6

-14%

Earth: Final Conflict

50

1.1

5

-29%

V.I.P.

60

0.9

5

0%
March