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Little Money in Market as Ad Execs Get Back to Work

The television advertising world was
unusually quiet over the summer and media buyers don't expect a rush of
activity now that Labor Day has passed and a new season approaches.

Back from the holidays, buyers are now working with their clients to turn
upfront reservations- called holds-into orders. The 2012 upfront didn't measure
up to 2011's, and there doesn't appear to be much money in the pipeline to
improve the picture for the networks.

"This is that crazy week where everybody wakes up and says, ‘I'm going on the
air in a couple of weeks. I've got to get this stuff ordered. Can I get my
contract?'" says Rob Tuck, executive VP for ad sales at The CW.

Tuck says that so far, orders are tracking what was booked in the upfront.
"We're really not seeing much if any change," he says.

But Rino Scanzoni, chief investment officer at media buying giant GroupM, says,
"You're going to have some breakage." That breakage- fallout and cuts from
upfront buys-will be in the usual 2%-3% range, Scanzoni says.

Then, Scanzoni adds, "We're going to be dealing with a relatively lackluster
scatter market, which I think is clearly going to be a challenge in the fourth
quarter. And I think we're going to see that into 2013."

During their second-quarter earnings calls, most media companies said they
experienced a slowdown in the scatter market for the third quarter because of
ad money flowing to the Olympics. Most said they expected a recovery in the
fourth quarter.

But another major buyer says that normally at this time of year, a number of
clients try to add money to their upfront buys to take advantage of prices that
are lower than scatter. This year, however, "we've seen very, very little of
that," the buyer says. "I think that probably the big takeaway is without any
new money and a little slippage [as upfront holds go to order], the networks
and the cable companies are going to be disappointed with their sales volume."

As far as the scatter market goes, one key will be how much money retail
companies will spend starting in October ahead of the holiday season. Marketers
will also be looking at the November election returns as an indicator as to
whether or not the economy is likely to improve.

Tuck says The CW has done a little bit of early fourth-quarter scatter
business. "We've had some rumblings of people checking out some pricing," he
says, adding that prices are above upfront levels. "I would suspect that once
we get past these [upfront] orders, then at least [advertisers] know what they
need and things will start picking up."

Tuck says he's excited for the season to start. "This is the time of year when
you're just so anxious to get your new stuff on," he says.

But Sam Armando, senior VP and director of strategic intelligence at SMGx, part
of Starcom Mediavest Group, says new shows on the networks' fall schedules have
caused little excitement among clients and little buzz with viewers.

Armando says the new crop of shows was about average and that the broadcast
networks will continue to endure ratings erosion-as will the top cable
networks-in the face of DVR playback in primetime, new over-the-top viewing
options and other entertainment options.

"It's been a really quiet summer. Usually we get cast changes, title changes,
schedule changes. There hasn't been a lot of buzz," Armando says.

Of course, in the TV business there's always next year. One cable network ad
sales executive says he's already starting to schedule meetings with media
planners over the next two to three months to lay the groundwork for the
channel's position for next year's upfront. "It's like Groundhog Day. We just
start the cycle all over again," the executive says.