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AMC, Sensing Ad Dollars On Table, Makes Bid For ‘Scatter’

If you’ve got Oscar nominees on the brain, AMC Networks has a slew of alternate candidates “for your consideration.”

Media-buying executives are about to receive an ad touting new AMC programs like “Fear The Walking Dead,” “Preacher” and “Feed The Beast” in a promotion designed to look like the trade advertising movie studios routinely run in an attempt to hype their films for the annual Academy Awards,.  The idea, said Scott Collins, executive vice president of advertising sales for AMC Networks, is to remind current and potential sponsors that the company’s flagship network has dramatically increased its slate of originals at a time when advertisers seem poised to loosen their purse-strings. The Oscars are slated to take place this weekend.

“More money has come into the marketplace,” Collins said in an interview.

AMC Networks is making an aggressive bid for new ad dollars in the months leading up to TV’s annual “upfront” market, a signal that media companies believe Madison Avenue has opened its vaults and is showing new willingness to spend after a fallow period. At stake is so-called “scatter” advertising,  or ad inventory that is sold closer to air date and often commands a premium – and, perhaps, a lot more.

When “scatter” pricing rises over that secured during the annual “upfront” market, in which TV networks sell the bulk of their ad inventory for the coming season, that generally augurs a healthy upfront. Advertisers tend to lock in rates that seem to be on the rise, and primetime broadcast TV alone can capture more than $9 billion. “Advertising should continue to be a benefit over the course of the year and lead to a stronger upfront than prior years’ disappointments,” said Michael Nathanson, an independent media-industry analyst, in a Friday research note.

Indeed, for the past three “upfront” sessions,  pricing has been tepid.  Based on guidance from buyers, Variety estimated the five networks secured between $8.02 billion and $8.69 billion for their prime-time entertainment schedules in the 2015-2016 season, compared with between $8.17 billion and $8.94 billion for the 2014-15 season. The performance marks the third consecutive upfront in which volume committed for primetime fell.

Could it be a time for a switch? Executives from many media companies, including CBS Corp., Viacom, Time Warner Inc and NBCUniversal have in recent weeks cited robust “scatter” buying trends in the first and fourth quarters. To be certain, some of the increases may result from the gradual declines in viewership that come about as couch potatoes migrate to new screens on mobile tablets and other devices. But there is also a sense that advertisers find TV more reliable than some of the new digital venues that have sprouted in recent years.

AMC, said Collins, wanted to get word of its offerings out to the market because its schedule is radically different from a year ago, and  media buyers tend to build ad schedules by “mirroring” what they bought with a network or network group in the prior year.

“We’ve gone from five original shows to ten,”said Collins, citing the debut of “Fear The Walking Dead” in the second quarter, along with a new iteration of its post-‘Dead” after-show; a miniseries, “The Night Manager’; and “Feed the Beast,” a new drama about enterprising restaurateurs.  The second quarter will also feature the season finales of two of TV’s priciest dramas for ads: “The Walking Dead” and “Better Call Saul.”

“I think people felt over the last couple of years-plus that the scatter market had not been robust, so they didn’t pay a penalty to hold on to their money,” said Collins. But in recent weeks, marketers “paid a penalty in the fourth and continue to pay a penalty in the first.” While he noted ratings erosion may play a role in the price hikes, he noted that AMC’s programs are notching good viewership numbers, making them alluring places for commercials to run.

Some of AMC’s dramas command some of the highest ad prices on TV.  A package of ads in “The Walking Dead” in the current season commanded an average of $502,200, according to Variety’s annual survey of primetime ad prices. A package of commercials attached to “Fear The Walking Dead” cost an average of $395,000. And a commercial package in “Better Call Saul” cost an average of around $200.000.

Little wonder, then, that AMC is out to capture scatter purchases that would presumably fetch even healthier figures.

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