Like the broadcast and cable networks, the syndication world is sweating over how this year's upfront plays out. Given the environment, syndication is expected to book less than last year's $3.2 billion in revenue, but how much less remains to be seen.
And the prognostications are well underway. In March, the Jack Myers Report estimated that syndication would be down 2% to $3.1 billion, while Francois Lee, VP and activation director at MediaVest, says, “I would expect 2% to be the lower end of that ballpark estimate.”
Syndication ad sales chiefs say their marketplace will go as broadcast and cable networks go, and while none of them are bullish about this year's advance ad market, they are predictably putting on a brave face.
“There are so many reasons why you would buy upfront even in a soft market,” says Bob Cesa, executive VP of ad sales at Twentieth Television. “You want to be able to take advantage of pricing, especially in this economy. You want the flexibility that buying upfront offers. You want to be able to book time in the shows that you want, and you want to make sure you are in that show in a predominant position over your competitor. And you might want to do product integrations. If you wait until scatter, you may not get that.”
Headed into the upfronts, sales forces are busy pitching syndication's many benefits to advertisers. Syndicators say they offer advertisers the most consistent ratings of any TV segment. Years of ratings data and day-in day-out performances by veteran shows give advertisers a clear purchasing picture. Unlike broadcast and cable, advertisers buy syndication by the show, so they can buy time every Thursday in CBS Television Distribution's Oprah or every Monday in Warner Bros.' Two and a Half Men, shows with high, consistent ratings that appeal to advertisers.
“There's very little seasonality to our ratings,” says Michael Teicher, executive VP of media sales for Warner Bros. Television Group. “That speaks well for syndication. Advertisers know the programming. They can rely heavily on the fact that we'll deliver the ratings we say we will. They know the programming they've purchased will be there throughout the year.”
Syndicators have some objections to overcome with that argument. MediaVest's Lee says, “We feel that syndication is as exposed to ratings fluctuations as any other sector,” and points to Dr. Phil's year-to-year ratings drops of as much as 25%.
True, ratings for many syndicated shows have declined, but that's an issue television in general is contending with as viewing options keep multiplying. Syndication, however, has been less affected than broadcast primetime by digital video recorders. Viewers watching CBS's Entertainment Tonight or Twentieth's Family Guy are typically watching live, and thus seeing all of the commercials.
That's one reason why advertisers are drawn to brand integrations within syndicated programming. And syndicators are pitching to ensure those opportunities—such as Warner Bros.' Walgreens integrations into both the Ellen DeGeneres and Bonnie Hunt shows—are available, and suggesting that advertisers need to book time now.
“The whole concept of branded entertainment is something that's of high interest and high value to advertisers,” Teicher says. “At its core, it's DVR-proof.”
The broadcast upfront presentations are less than a month away, but much remains unknown about this year's market. Advertisers, facing a chaotic consumer marketplace, still haven't set their budgets, making it impossible to know what they plan on spending.
Some things are certain, however. Companies who want to sell product know they continue to need to advertise. And at this time of year, ad sales chiefs are always reminding anyone who will listen that buying inventory in the upfront remains the best way to secure pricing guarantees, protecting advertisers from future price increases.
“A tight scatter market can drive prices up as much as 50%-70%,” says one industry observer. “Clients freak out if they are paying premiums of 30%. In this business, you want to protect your client and you want to protect yourself, which is why you want to secure program selection and guaranteed ratings.”
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