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Advertisers continue to pullback ad spending - Broadcasting & Cable

Advertisers continue to pullback ad spending

AETN predicts Q2 decline will be in the "low to mid teens"
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A&E Television Networks ad sales chief, Mel Berning, said today that his networks are seeing advertisers pull back their ad commitments by a percentage in the "low to mid teens." He was referring to the second quarter cancellation options allowed each quarter.

The executive vice president in charge of sales at A&E and History Channel among others, was speaking on a conference call this morning with Credit Suisse media and advertising analysts. "We're seeing the first battle of the upfront shaping up with options," he said, outlining the possibility that marketers could be taking money out of the market to spend it later, potentially to get better rates.

The company still had not heard from many advertisers about their second quarter spending plans. "For us the run rate is mid to low teens, I suspect that's where it's going to end. It's extremely hard to tell how much is real business problems and how much people want to play the market." He added, "Low teens is not a horrible number, but it's not a mark of strength."

The weaker second quarter could lay the groundwork for a slow upfront, he predicted with marketers coming to the market late. When asked by analysts about the spending levels of the three "train wrecks" - autos, retail and financial, he agreed there was weakness and added that there was some softness in home furnishings, appliances and travel categories while health and beauty; packaged goods, computers and entertainment were the brighter spots.

Yesterday (Thursday), HGTV and Food Networks' owner Scripps Networks Interactive reported second quarter cancellations were also in the mid-teens, up from the first quarter when they were 6%.

Separately, News Corp. reported cancellation rates at Fox broadcast network were running at about 8% with company chief operating officer and president, Peter Chernin, saying on an earnings call that rate was expected to increase to 11% when advertisers had recorded their plans.

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