CBS Corp. chief Leslie Moonves is feeling bullish about the health of the network TV advertising business going in to the upfront selling season, despite global economic jitters that haven driven so much volatility on Wall Street this year.
Moonves, discussing CBS’ fourth-quarter earnings Thursday on a conference call with analysts, said the second quarter of this year was looking strong, with scatter pricing growing every month well over the upfront rates set last summer. That dynamic should funnel more dollars into this year’s upfront.
“I think it’s going to be substantially higher than it has been in the past year,” Moonves said of this year’s upfront. He chalked it up to simple math: “A guy who bought ads from CBS in October paid nearly 20% more than he would have if he’d bought them from us in July (during the upfront),” he said.
CBS notched an 8% gain in ad sales at the CBS network in the fourth quarter. The first quarter of this year will be turbo-charged by CBS’ Super Bowl telecast, in which the rate for some 60-second spots hit $10 million.
Moonves said he also expected to see progress this year in setting advertising guarantees in the upfront based on C7 ratings, or commercial ratings that incorporate seven days of delayed viewing after the initial telecast. Most deals are done on the basis of C3 ratings, but networks have pushed for the longer C7 time frame as delayed viewing via DVR, VOD and streaming has increased.
Moonves predicted, “This year more than 50% of the deals will be (based on) C7,” he said. Advertisers and media buyers “are realizing that C7 is a better way of measuring” viewership, he said. Last year CBS’ sales team pushed hard for C7 deals but didn’t secure as many as they’d hoped, he acknowledged.
Moonves stopped short of predicting a specific level of gain for CBS in this year’s upfront, which typically begins in early- to mid-June after the networks unveil their fall season slates in May.
Moonves, who is now chairman, president and CEO of CBS Corp., was asked by analysts on the call why he sees network TV advertising as so resilient amid other troubling signs in the global economy, such as falling oil prices and concerns about China facing an economic meltdown from bad loans.
Moonves cited the uniqueness of network TV to draw mass audiences, such as the 20 million-plus viewers CBS typically achieves with hits like “NCIS” and “The Big Bang Theory.” Those ratings have become an even more precious resource in a fragmented world, and with the growing concern among advertisers about the validity of digital audience guarantees. But he admitted that the buoyancy of advertising in the past three quarters has been a pleasant surprise.
“Back in ’08 we saw (the downturn) coming. It was there right like a big shining light,” Moonves said. “We’re not seeing remotely anything like that. We can see advertising (sales trends) up through the second quarter and we have not seen any sign of that at all.”