Top Syndicated Shows Hold Their Own in Upfront

Focus shifts to scatter marketplace as advertisers wait out economic slump
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Top-rated syndicated shows came out strong from this year's syndication upfront, with costs-per-thousand (CPMs) for syndication's top tier—such as Oprah,Entertainment Tonight, Two and a Half Men and Family Guy—dropping just 2%-4% compared to last year. Lower-tier shows were down 5%-12%, according to syndication and agency sources. Syndication's blended CPMs were down 4%-5%.

“This was a flight to quality like I've never seen before,” says one syndication executive. “People probably had a really difficult time once they got past their top-tier shows.”

Much like the broadcast and cable networks, syndication's sales volume was down 10%-20% overall. In 2008, syndication reaped $2.4 billion in upfront sales, a 4.5% increase from 2007. Accordingly, this year's upfront take should approach $2 billion.

Volume was down across the board because most advertisers remained unwilling to commit to spending money on advertising while the economy is still shaky. Many advertisers are holding out for the scatter market to gain more flexibility in their buys—setting up yet another showdown.

With a few economic indicators starting to trend upward, many syndicators are predicting (or hoping) that advertisers will gain confidence by the fourth quarter, thereby stimulating scatter sales. Thus syndicators are throwing out the familiar warnings that if things do turn around, advertisers may find that they can't get into the shows they most prefer.

“Advertisers still don't know if the consumer is going to buy at this point, so some have taken the stance that they are going to be more guarded about spending their money and not go upfront,” says a syndication executive. “The ones who are doing that are gambling.”

But this year, it's a risk many advertisers are willing to take. “If people start getting jobs again and the economy really starts to improve, advertisers will start to feel more confident and commit dollars in scatter,” says Gary Carr, senior VP and executive director, national broadcast, for TargetCast TCM. “But right now, budgets are down because advertisers need flexibility. No one wants to commit to big hunks of advertising when they are not sure how their business is going to be performing down the road.”

There are a few advertisers faring well in this economy, such as fast-food providers, that are taking advantage of efficient upfront pricing to bulk up their advertising. They are thinking that in a down market when competitors are hedging their bets, they should be more aggressive in their buys.

Other advertisers already are anticipating a strong scatter market and are asking syndicators if they can add to their upfront buy at upfront prices.

“We're three or four weeks away from pre-scatter buying,” says a syndication salesperson whose predictable message to advertisers is “buy now.” “Once Labor Day hits, we're going to be less willing to make deals at these prices.”

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