Fourth Quarter Scatter: Up, Down, Or All Around?

by Wayne Friedman, Nov 15, 2012, 4:39 PM

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The big fourth quarter scatter market is always a benchmark for many TV sellers due to the push for end-of-the-year holiday consumerism. And this year's market is, well, iffy.

On the one hand, you have a number of sellers talking up the scatter market – saying that pricing is up by "double-digit" percentages. But as we all know that is never the whole story. Other factors are important, as in how much inventory is available (the supply), and what kind of total revenue volume should be expected (the demand).

For many networks, the bottom line is always total scatter revenue, because that gives a better indication about how the economy is doing, and -- more important -- what major TV marketers are doing in the economy.

CBS' Les Moonves says scatter pricing is up by double-digit percentages. But we don't have deeper information, like how much actual scatter volume is being inked in the fourth quarter and what is expected for next year.

On the other hand, we have the likes of NBC, which for the first time in nearly a decade is ahead of all networks among 18-49 viewers, and ahead of where it was a year ago. This means it is the one network that doesn't have any inventory problems, so it doesn’t need to hand over make-good commercial time like virtually all other broadcast networks. So NBC would seemingly have ample availability to take in sizable amounts of scatter volume.

The typical historical upfront-scatter equation goes like this: Strong upfront equals weak scatter market. Or: Weak upfront equals strong scatter. It's the in-between stuff that has us scratching our heads.

This year's upfront market was good but not as strong as in summer 2011. So what about scatter? Here's Peter Knobloch, chief executive officer of media agency RJ Palmer: "The bottom line is [fourth quarter] spending has not been robust and it has not been consistent. But categories like telecom are starting to come in and there will always be pre-Christmas money to spend."

Still, he adds, "RJ saw this pattern of soft scatter quarters consistently developing over the past year.  Now across the board in [fourth quarter] prime, cable, sports and syndication, significant opportunities abound. This is especially advantageous for scatter-only advertisers. The reasons still include the obvious with the economy and caution being top of mind on both sides. Suppliers weigh their options in a tough-to-call market."

Where do cable networks fit in? It depends. If you have the high-rated original scripted shows that many marketers want -- like the broadcast size and growing 18-49 ratings that AMC's "Walking Dead" gets -- you'll do well. But in a market where sellers say money is coming in "slowly," that puts a damper on things.

Right now, "slowly" seems like code for soft.

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