Q4 Ad Activity Beating Expectations - Broadcasting & Cable

Q4 Ad Activity Beating Expectations

Retail, surprise auto spends buoy scatter, though market not robust
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It's rare that media owners and media buyers agree on the state of the TV ad market, but both sides suggest that the final quarter of 2009 is proceeding at a brisk pace. One category buoying the market in particular is retail, with the likes of Wal-Mart, Target, Macy's and Kohl's all jostling for the best ad slots and starting the holiday season almost as early as Hollywood.

Domestic auto marketers are also out spending more than expected, with Chrysler something of a surprise, say market players. On the CBS third-quarter call, CEO Leslie Moonves said: “Toyota, Ford and GM have all been very public about their need to spend more money in advertising. We've certainly seen the benefit of that.”

Moonves said scatter pricing was running 25% above upfront levels in the fourth quarter, while Disney says it is seeing a 20% premium on upfront rates in the current period.

A note of caution

Gibbs Haljun, managing director of media investment at Mediaedge:cia, told B&C, “There is definitely some fourth-quarter activity, better than anybody expected.” But he added a note of caution: “It isn't overly robust or super-strong.”

Agency buyers say scatter pricing is running anywhere between 7% and double digits, depending on the client. Some media outlets are agreeing to multi-quarter deals so they can pay little premium on packages for the first, second and third quarters. That almost seems like the upfront's second coming.

First-quarter cancellation options, due 45 days prior to the period, are described by buyers as “very minimal.” Disney's CFO Tom Staggs—who is moving over to run the parks division—says that ABC had experienced more option pickups in the calendar first quarter than in the past 10 years.

The reason for the confidence is still a mystery to some in the market, given that consumer sentiment isn't strong and unemployment figures for October are high at 10.2%. One factor affecting market dynamics is the reduced level of inventory. This results in greater demand for fewer spots, which in turn pushes up pricing.

Olympics picking up for nbc

Primetime-live-plus-same-day ratings are down anywhere between 10% and 12% depending on the network, with NBC having a more difficult time than others. Late night is down 20% year-on-year, according to Haljun, who adds that cable hasn't been immune to the ratings declines.

One area seeing a particular uptick in fourth-quarter ad sales are the more modestly priced properties such as syndicated court shows. “The court shows can be through the roof because of the small unit load, and they're very efficient,” Haljun says.

Other agencies say that NBC Universal's Olympic sales have picked up significantly over the past month, much to the relief of the sales team. One executive familiar with the market said General Motors has been out buying Olympic units despite having given up its position as an official game sponsor in 2008.

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