TV Execs Predict Windfall From Wireless Providers

Broadcast and cable networks say they are anticipating as much as $100 million in fourth-quarter scatter dollars from a host of wireless service providers that, if realized, could spill into 2004 scatter. There’s only one hitch: Media buyers for some of the biggest wireless companies counter that easily less than half that amount will flow into the national TV scatter marketplace.

“There is speculation that [wireless companies] could increase spending, but we all have such big schedules running already,” said Rino Scanzoni, president of the broadcast division at WPP’s Mediaedge:cia, which handles AT&T’s TV buying. “Whatever the [network sales execs] were smoking when they came up with a number like [$100 million], I would like some.”

Scanzoni acknowledged the wireless category is “a reactive business,” and that if one company starts spending big supplemental scatter dollars, the others will protect their customer bases with commensurate spending.

Driving TV execs’ predictions is the Oct. 7 Federal Communications Commission mandate that, beginning Nov. 24, customers can keep their mobile phone numbers if they switch wireless service providers. The anticipated ad war is considered vital to the future pecking order of the category.

“Beginning Nov. 24, you will not be able to turn on your TV without seeing a spot from one or more of those companies in every show,” said one broadcast sales exec. “This is going to be a good, old-fashioned marketing fight. And it is going to be bigger than the battle for long-distance customers that AT&T, MCI and Sprint waged in the mid-’90s, because there are more companies involved. They are all worried that the company that makes the biggest noise will end up with the biggest share of new customers.”

“It’s a turf war,” said Neil Baker, svp of ad sales for E! Networks, whose young demographics attracts wireless clients. “We have enjoyed working with [wireless companies], especially now with this change in their business.”

Added Bruce Lefkowitz, evp of ad sales for Fox Cable Networks: “With all of the wireless services … this has the potential to be a huge TV category.”

The six major wireless providers—Verizon Wireless, AT&T, Sprint PCS, T-Mobile, Cingular and Nextel—spent a combined $720 million on broadcast and cable ads in 2002 (excluding spot TV and syndication), and $540 million through August of this year, according to Nielsen Monitor-Plus. The companies traditionally spend the most in the fourth quarter.

The wireless companies deny they are spending heavily in scatter. “We normally plan aggressive levels of advertising [in the fourth quarter],” said Verizon Wireless rep Brenda Raney. “But local number portability has no impact on that decision.”

Buyers for the wireless providers noted that they bought significant fourth-quarter inventory during the upfront, meaning any messages touting number portability could be worked into time already purchased.

But TV sales executives insist they’re seeing more activity. “There have been a lot of conversations about inventory availability in our big-ticket programs,” said a top sales exec at Turner Entertainment Nets. “Wireless will continue to be the major growth category for us, and we even anticipate that it could be the growth category down the line.”

The wireless providers are watching Verizon, the leading spender of new scatter dollars, said one broadcast network executive. “Scatter spending could approach $100 million if everyone jumps in,” the source said.