Q4 Ad Activity Beating Expectations

Retail, surprise auto spends buoy scatter, though market not quite robust

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.