Despite a rash of troubling macroeconomic indicators that suggest the recovery may have lost its forward momentum, media buyers and network executives are confident that the TV advertising marketplace will remain robust through the end of the year. After that, it’s anyone’s guess.
In the waning hours of an upfront that saw clients commit to some $18 million in national broadcast and cable inventory, buyers had intimated that scatter would begin to dry up in the third and fourth quarters. This has not been the case, however, as pricing continues to come in at around 20 percent over upfront levels.
Buyers and sellers have begun the process of converting holds to orders, and while there’s still some time on the clock, early indications seem to support the notion that there won’t be an inordinate amount of breakage. “So far, just about everything seems to be holding up,” said one national TV buyer. “If I had to put a number on it, I’d say maybe 5 percent won’t stick. But that’s par for the course.”
On the broadcast side of the ledger, ABC, CBS, NBC, Fox and The CW are all facing another arduous autumn battle, as cable continues to make raids on prime time and younger viewers get lured away from the tube by the digital pied piper. Last season, only Fox managed to grow its share of adults 18-49, and in the aggregate, cable now enjoys a two-to-one lead in share.
“If ratings tank in prime time, then the money will run out of broadcast like gangbusters,” said one ad sales chief. “So say the shows don’t perform and the economy gets really hairy. Then you’ll have a situation where clients are going to want to move their money into out quarters—in other words, Q1 and Q2, the quarters where they can actually take options.”
While the only things certain in life are death, taxes and Nigerian e-mail spam, most industry observers will tell you that sports are a sure thing. “Football is the closest thing there is to bulletproof,” said Joel Hollander, founder of 264 Echo Place Partners.
The former chairman and CEO of CBS Network Radio and general manager of New York’s sports radio leader WFAN-AM, Hollander said that sports and politics alone should keep the networks humming through the end of the year. “There’s going to be a ton of political money starting now, and it’ll all just pile up as November approaches,” he said. “Certainly, the rest of this year looks like it’s going to be strong.”
How robust is the football marketplace? With a little less than two weeks to go before kicking off its 51st season of covering the NFL, CBS’ Sunday broadcasts are about 90 percent sold out through the playoffs. Meanwhile, the net is close to selling off the last piece of its SEC schedule. “At this time last year, we were going into season with a lot of inventory on our hands,” said CBS Sports evp of sales and marketing John Bogusz. “This year, the market has moved earlier, and volume is way up.”
Automotive dollars had a big hand in the rush on NFL avails. “Last year, we knew Chrysler wasn’t coming in. Toyota wasn’t on CBS, and we weren’t sure where we stood with GM although they eventually did come in for a fair amount,” Bogusz said. “All three are already back this season, as is Ford, which has always been a consistent spender.”
Telecom has also been active at CBS, Fox and ESPN, as AT&T, Sprint and Verizon have ramped up their respective commitments to pro and college football. The insurance category has secured a good deal of airtime, and other endemics such as beer, QSR and movies are also spending freely.
All told, Bogusz said CBS is on track to sell a record amount of advertising for its NFL games, a projection shared by the other pro football outlets.
After putting up record deliveries last season, ESPN’s Monday Night Football is just about sold out. The sports net’s college football games are also selling like proverbial hotcakes, according to Ed Erhardt, president, ESPN customer marketing and sales. “Yes, the auto market returning has been a big deal, but there’s also the fact that live events have become more crucial in the minds of the advertising community,” he said.
To answer Hank Williams Jr.’s rhetorical question, here’s how ready the nation is for some football. On August 16, ESPN’s first preseason Monday Night Football telecast drew 5.61 million viewers, 3.09 million of whom were adults 18-49. To put that in perspective, the exhibition outdelivered every single regular season MLB telecast on broadcast and cable this season.
Pulling focus back from sports, while clients may begin retreating if the economy takes another dive, the near term looks promising for TV.
“It’s still the most cost-effective buy to support a brand, and brands are increasingly important as we go through these economic cycles,” said Howard Bass, senior partner, advisory services, global media and entertainment center, Ernst & Young. “The marketplace is relatively strong, and a big part of that is thanks to the sophistication and innovation of the agencies putting together the buys.”