Moonves: CBS May Sell Fewer Ads

Les Moonves of CBSIn this recessionary economy, expect fewer overall TV upfront advertising dollars, says CBS' CEO Les Moonves, but higher program pricing increases--at least at CBS.

"We may have to sell a little bit less," says Moonves, speaking at the Deutsche Bank media and telecommunications conference in Florida. "We'll take a large share of that [upfront volume]. We will not reduce our pricing. We expect pricing increases versus a year ago."

He added: "We'll play to our strengths, and say we believe our schedule will work. [We] believe that [next year's] scatter market will be strong."

Moonves estimates that TV advertisers will be budgeting fewer dollars for this upfront period. But he predicts that movie companies and others will still be buying plenty of TV advertising, especially in the scatter period.

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In regard to the automotives, he said: "Eventually, they are going to have to start spending money. The only way out of this is to do some advertising."

Of the current advertising market, he notes that CBS is getting the lion's share of the current scatter market, with pricing slightly up over the upfront.

"Advertising agencies are nervous," said Moonves. "They are looking for more clever ways of doing marketing, promotion, etc. They are going to be locking in budgets a lot later. They are dealing with a lot of nervous companies. The world is a different place."

Moonves is concerned about clutter--which historically has been increasing. "We have always had less clutter. It has always been a concern of mine that too much clutter distracts from your ratings. Ultimately, you need your ratings to stay in place."

Will there be consolidation among the major networks? Moonves thinks so. While CBS/Warner Bros.' CW network may be a question mark, he says: "CW loses very little money, split between two companies."

After five discussions about working with Time Warner's CNN to save news-gathering costs, CBS has yet to figure out how to work together.

So far this year, CBS has had stable ratings versus other networks, which have seen declines. CBS numbers are flat in the 18-49 demo, at around a seasonal average of 2.7, but up in all other demographics.

In this pilot season, CBS is doing less this year--six less pilots than a year ago. Moonves added that there is probably room for only three or four new shows on the fall schedule.

1 comment about "Moonves: CBS May Sell Fewer Ads".
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  1. Matthew Maginley from Maginley & Company, March 4, 2009 at 11:01 a.m.

    The Upfront will be especially challenging this year as it will demonstrate just how important it is to have relationships for this aspect of the buying cycle as compared to scatter market digital bidding dynamics of Google TV Ads.

    Being on the Agency side so many years, I have first hand experience relating to the dilemma of presenting to an audience on the client side , that although their budgets are down, due to supply and demand media costs are increasing in some areas.

    If you are as, Les Moonves and Agency "... looking for more clever ways of doing marketing, promotion, etc...." there are nice ways to use your leverage to negotiate on the client's behalf where it is a win for the client, a win for the media company and a win for the agency.

    You have to be smart about it though.

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