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Media Money
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The advertisers are waiting for the broadcasters to lower their prices and the nets are holding out. The longer the stalemate the less power the networks have, and the further prices drop. Analysts expect prices to drop by as much as 15 percent, which would bring the total spent on upfront ad sales down to about $7.4 billion from $9.2 billion last year.
It's a perfect storm for ABC, CBS, NBC, and Fox. Ratings are down, advertising budgets are tight and there are more other ad options than ever. Automakers are among the biggest TV advertisers, and with GM in the midst of bankruptcy proceedings Chevrolet isn't planning to do any advertising and other spending is sure to be scaled back.
Then there are the movie studios, who are usually huge advertisers trying to drive traffic to theaters each weekend. But this year, while the box office is high, downward pressure on DVD sales and in other divisions of media conglomerates is pushing studios to be careful about their advertising spend.
And across the board advertisers are looking for ways to spend less and better target customers. Consumer brands from Procter & Gamble and the like are all shifting more dollars to the web where they can interact with consumers and measure results.
There are a number of wild cards at play this upfront season. For one thing, companies are looking for some indication of whether and when the economy and consumer spending will recover, wary of committing tens of millions of dollars months in advance. This raises the often-asked question: does the upfront ad sales period even make sense? Or would it be more natural to buy ads on a rolling basis?
Then there are the changes the networks themselves are making. NBC is replacing five hours of scripted programming each week with Jay Leno's new show. The move is sure to save NBC millions in production costs each week, but the show is expected to bring in lower ad revenues. All the networks are looking for ways to lure advertisers, featuring them a sponsors and with product integration etc.
One thing's for sure, the idea of a predictable ad sales period in which ad time and revenue is nailed down doesn't seem to fit with the volatility both the networks and advertisers are juggling.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes