U.S. News

TV Turnaround: Sellers' Market for Ad Dollars

Michelle Lodge

As the television industry heads into the annual upfront advertising sales season, network executives can expect to hear two very sweet words—sellers' market—consultant Brad Adgate told CNBC.

“The upfront will be more of a sellers' market than it was during last year’s market,” said Adgate, of media services company Horizon Media. “That’s encouraging for the economy, which is pointing to a stronger, more bullish trend.”

“Last year’s upfront was the longest and most protracted in history. It was a long negotiation period, and it took longer to get started. That indicates that it was a buyers' market,” said Adgate.

Typically, the upfront, when media companies sell their slate of shows to advertisers, starts before Memorial Day and wraps up around the 4th of July. Last year, said Adgate, the selling carried into August.

Advertisers also hope to avoid the kind of bind they got into last year. While they waited out the upfront hoping for better rates, some ended up paying 30 percent more for ads later in the season, known as the scatter market.

This year, pushing up ad revenues even more, said Adgate, will be local, congressional and gubernatorial races.

The question yet unanswered, he said, is where will some of those other advertising dollars will go. Newspapers and magazines could share even more of this year's ad revenue with digital platforms, Adgate added.

"There's been a remarkable turnaround in the first quarter of this year, particularly in the United States. I describe it as, America bites back," said Sir Martin Sorrell, CEO of WPP Group, the world's largest marketing company by revenue, speaking about the economy in general.

He said areas to watch are new media, PC-driven media and video-related content. (Watch Sorrell's comments here for more information.)

“The ad market is recovering,” said Robert Iger, president and CEO of the Walt Disney Company, which owns the ABC, ESPN and the Disney Channel networks, among other properties. “The scatter market indicates that there’s real strength in the marketplace. We feel really good going into the upfront.” (Watch Iger's comments here for more information.)

Iger predicted that cable will bounce back first, followed by broadcast networks and, finally, local television.

Jeff Bewkes, CEO of Time Warner , said that ad revenues are up this year, especially in cable television, but across TV in general. Bewkes said: “Cable networks are looking at a very strong percentage increase versus ad sales last year.”