The annual ad bazaar known as the upfront market is winding down, and estimates are the three networks and Fox Broadcasting will be lucky to match last year’s $ 3.6 billion in prime time sales. Indeed, upfront business may be down by as much as 10%.
“We’ve estimated the upfront will end up at about $ 3.2 billion-$ 3.3 billion ,” said Joe Abruzzese, CBS senior VP of sales.
Abruzzese’s estimate is consistent with most industry estimates, with the exception of ABC sales honchos who are still predicting this year’s upfront — in which sponsors buy time in advance of the fall TV season — will match last year’s numbers.
But there’s a consensus in the industry that nobody is in a hurry to get into the market. The so-called scatter market, for advertisers who delay their buys until after the upfront, has been soft for two years, with prices generally at or lower than upfront prices.
“I have medium-size clients who are saying to me, ‘Will I get burned if I hold back 30% of what we have to spend and play the scatter market?’ ” says the media chief of a major agency. “I’m advising them that is a pretty smart gamble.”
In addition, doubts about the economy linger. Key sectors, such as packaged goods, have little or no new money to spend.
“We might do less overall business than last year’s upfront,” said a senior network sales exec. “But that doesn’t mean our revenues will be down. There’s just a lot of caution out there. If the economy comes back, we’ll see that money expressed in the scatter market.”
The best any network is doing in prime time sales is bumping prices up a percentage point or two above the rate of inflation. According to industry sources, CBS and Fox have been getting the biggest increases among the networks, ranging from 4%-7%.
ABC is booking increases in the 2%-4% range. NBC is having the toughest go, garnering rates that are at best up 1% and in some cases down 2% or more from last year.
Media mavens are quick to point out that the high end of those numbers represent commercial packages that are heavily loaded with the most desirable shows on the webs’ schedules.
“If you’re looking at 6% on CBS, that means you’ve bought heavy on Monday night,” one media buyer said, echoing the comments of his colleagues.
“If you’re paying increases at ABC it’s because you have to be in ‘Home Improvement’ and ‘Roseanne.’ Fox has been really sticking it to advertisers that need its demographics. But if you want to gamble on the new stuff, there’s super bargains out there. If you don’t care about angry letters and boycott threats, you can get great deals on ‘NYPD Blue.’ ”
Prime time may be sluggish, but the networks have seen signs of life in other dayparts. The upfront for daytime is pretty much over and sales were robust.
With shrinking inventory in daytime, driven by NBC’s cutback of its daytime schedule, scatter prices have been running 10%-25% higher than upfront. This year’s daytime upfront, according to industry sources, came in at about $ 925 million, which represents about a 9% increase over last year’s figure.