Les Moonves, the upbeat CBS CEO, isn’t the only one predicting a strong upfront this year.
After strong ad revenue figures in most fourth-quarter earnings reports, Brian Wieser, an analyst at Pivotal Research, sees an upfront with low single digit volume growth and high single digit pricing.
RELATED: Early Word on 2016 Upfront Volume: It Will Be Up
The upfront only reflects part of the national TV market, and Wieser warns that “investors shouldn’t expect that national TV can do much better than the total market for advertising will do, which should see +2 to +3% growth once again (ex-political and incremental Olympic advertising).”
That’s still a lot better than the gloom and doom forecasts for TV advertising that were circulating on Wall Street in the middle of last year and during a down beat 2015 upfront.
Wieser warns that there are shifts of spending from TV to digital, but says it’s on the margins.
Wieser expects a strong first quarter for national TV spending and for 2016 to be at least a good a year as 2015 was.
“We believe this is because for advertisers, ad budget decisions focus on least-bad alternatives. For those seeking broad reach, sight-sound-and-motion and brand awareness, traditional TV still utterly dominates all alternatives despite the growth of digital media owners and increasing consumption of video on internet-connected devices,” he said in a report late Thursday.
“This advantage will hold for many years. Digital media owners such as Facebook can offer reach and frequency, but in lieu of spending on content which brands will want to align their products with, mere reach and frequency won’t do,” he said.
Here’s what CBS’ Moonves had to say about the upfront on Thursday's earnings call (and he wasn’t the only media company executive pointing to a strong market).
Moonves noted that CBS’ upfront revenue was down amid concerns about ad dollars shifting to digital.
“There was a little bit of nervousness,” he said, but “beginning in the third quarter scatter went up in terms of – high teens, we're talking about – and that continued into the fourth quarter, and continuing to the first quarter."
“So, once again, we always like to say that a guy who bought ads from CBS in October paid nearly 20% more than he would have if he would've bought from us in July. As this momentum continues – and, once again, tightened by the great sporting events we have, the Grammy awards, political advertising locally – but at the network, the scatter is getting better every month."
Moonves declined to provide numbers, but he said this year’s upfront is “going to be substantially higher than it has been before, than it has been in the past year. And I think it generally follows that when scatter is this strong, the upfront continues to be strong, and we're anticipating that now.”
(Photo via Pictures of Money's Flickr. Image taken on Sept. 17, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)
