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Ad Market: Many Happy Returns

IT’S TIME TO BREATHE a sigh of relief. Advertisers are back, and as Comcast, Viacom and Discovery can attest, marketers are loosening their purse strings. Last week’s earnings calls shed some light on this newfound attitude, with executives now freely admitting how scary the year-ago quarter really was.

Comcast reported a 24% increase in local ad sales (the company didn’t break out ad revenue at the programming division) while Viacom reported a 3% global rise in ad revenue; domestic ad revenue was up 1%.

“It will be a happier time for sellers of advertising this upfront season than it was last year,” Viacom CEO Philippe Dauman said on the earnings call, though it would be hard to imagine it being worse.

Naturally, some caveats remain. Viacom would love to see studios spend a bit more on advertising, and AOL spoiled the party by reporting a 13% decline in online display as Yahoo and Microsoft reported double-digit increases. But the ad market is looking decidedly more bullish. This quarter, there’s less hyperbolic rhetoric and more real evidence of an actual recovery.

As good an indication as any might be that for once, even the ad agencies that make it their business to talk down the market pre-upfront are on the same page. At a conference last week, David Poltrack, CBS’ chief research officer, seemed to test the waters with a pointed question to Donna Speciale, MediaVest’s president of investment and activation. Poltrack asked if marketers were allocating more money to advertising rather than other marketing disciplines such as events or shopper marketing.

“I would say yes,” Speciale answered. Procter & Gamble, a Speciale client, recently committed to a $100 million ad deal ADverse with OWN, Discovery Communications’ Oprah network, nearly eight months before the network’s official launch.

First-quarter reports are on the docket from Belo Corp. (May 3), News Corp. (May 4), Time Warner and Sinclair Broadcast Group (May 5), and Scripps Networks Interactive (May 6). The auto market and bigger political money should help drive station-group stock prices upward next week, provided the broader market is willing. In a report out April 29, media consultancy BIA/Kelsey predicted a 7.5% increase in TV station ad revenues this year, to $17.5 billion.

On the national front, Barclays Capital media analyst Anthony DiClemente believes auto money could help bring about a 20% increase in upfront dollars to $8.26 billion at the Big Four networks. He also notes that packaging of broadcast, cable and Internet ads will play a bigger role in the upfront this year.

And as if to prove the point, NBC Universal was out last week aggressively marketing its integrated sales offering. The company will roll out a first-of- its-kind ad campaign to promote efforts to slice and dice its audience according to advertiser needs. The question is: Will packaging by any of the big cross-platform sales operations draw new advertisers to the fold or simply drive down CPM pricing?

It’s clear that advertisers are seeking to again marry online and TV ad buys, after a year of abandoning the Web. But how fast the online video revenue stream grows is anyone’s guess. One network chief last week noted that his colleagues were still weighing how much time to devote to online video in upfront presentations, adding that there’s a fine line between entertaining the audience and imparting pertinent information.

Upfront aside, Nielsen’s private equity owners clearly see the present as a good time to strike. The Financial Times reported that the measurement giant is preparing for its long-awaited initial public offering, having sent out its book to bankers.

That likely change of status has big media companies asking, simply, whether Nielsen’s senior management will be around for the long haul to steer the TV Everywhere initiatives to their ultimate destination. For now, that seems a distant concern, while the upfront dog-and-pony shows hit full stride.