NEW YORK — Cable networks are raking in so much advertising revenue this year — a projected $10.2 billion — that even industry cheerleaders can’t believe their eyes.
“It all started with the upfront selling season,” said Joe Ostrow, president and CEO of the Cabletelevision Advertising Bureau.
Ostrow is referring to the unexpected decision by advertisers to pour money into cable in April and May of this year, well before they ponied up the big bucks to the broadcast networks. In past years, most advertisers had waited to complete their broadcast buys before they opened their checkbooks for cable.
But this year, cable “started to become the medium of choice for sophisticated advertisers,” he said. “If an advertiser is looking to target an audience, it’s the cable networks that can deliver a brand in the clearest way.” As examples, he cites ESPN for male sports viewers, MTV for the 12-to-24 audience and CNN for older adults interested in news.
Cable appears to be benefiting more than broadcast TV and TV syndication from one of the most robust marketplaces in the history of American advertising.
“Spending is up in just about every category,” says Tim Spengler, executive VP and director of national broadcast for Western Intl. Media.
Broadcast TV is just coming off an upfront season that reaped $8 billion for primetime alone. While advertisers are increasing their media buys “across the board,” Spengler says, “two that stand out are direct-to-consumer drug companies and retail stores.”
The CAB has just wrapped up its latest projections, which reveal that ad revenues for the national cable networks will climb to more than $10 billion for the first time.
In year-to-year growth, the CAB forecast is that cable will soar by 22%, from $8.3 billion in 1999 to $10.2 billion in 2000. That’s 5% more than the CAB’s original estimate of $9.7 billion for 2000.
Ostrow says advertisers also have been adding to their cable orders because of “the volume of original programming that cable puts on the schedule. More than 70% of all of the programming on the cable networks is produced by and for cable,” Ostrow said.
The $10.2 billion figure for 2000 covers only advertising time sold nationally by basic cable networks. When CAB’s researchers include advertising revenues from all of the spots sold by local cable systems and regional sports networks, the annual projection shoots up to $13.5 billion in 2000, a 20% increase over 1999’s total of $11.2 billion.