• by Wayne Friedman , October 5, 2009

The fourth-quarter TV scatter advertising market has some good news for buyers: less price-gouging than expected, according to media agency executives.

"They have not been greedy," says one veteran media agency executive. "[Networks] are up -- modestly." Others believe the slight uptick will help to normalize the TV advertising upfront marketplace -- one that has seen some dramatic changes. 

"Scatter pricing is above upfront, which is what it should be," says Donna Speciale, president of investment and activation of MediaVest USA. "Modest increases are good." 

Executives are estimating that cost-per-thousand-viewers prices are up about 1% to 3% -- for most of the bigger broadcast networks -- over the just-completed upfront selling period. 

Many of the niche channels' ad-selling executives have different perspectives, with business decidedly stronger. Estimates here are that CPMs are 6% to 10% higher than upfront. 

"Scatter is looking solid with a fair amount [of money] working," says Mel Berning, executive vice president of advertising sales and marketing for A&E Networks. 

"It's very healthy," adds Rob Tuck, executive vice president of advertising sales for the CW. "We have been active in the fourth quarter."

Tuck says movies, electronics, retailers, and health and beauty products were particularly busy buying schedules on the network.

Many industry analysts have been expecting that sellers would gain some leverage going into the now key fourth-quarter scatter market that started Oct. 1. This is a result of the weak selling upfront market, which finished some weeks ago, where networks sold less inventory.

Fewer sales of TV inventory during the upfront period resulted in 20% fewer overall dollars, with program pricing down 2% to 7% versus the upfront selling process of a year ago. The hope is that TV marketers will be moved into buying more in the scatter periods, media sellers say -- including making big fourth-quarter deals.

One media agency executive estimates that many marketers that bought less TV time in the first half of the year are now looking to take that money and spend it in the second half.

Still, another media agency buyer said it's too early to tell how the quarter is performing -- given the late-moving summer upfront buying process. TV marketers had been adding to upfront buys late August/ early September, making money that should have gone into fourth-quarter scatter deals indistinguishable from upfront deals.

In regard to ratings points that have been generated so far by the big broadcast networks in the new season, there has been little viewership fallout in the initial days versus the bigger broadcast erosion of a year ago.

Last season, the five networks were down about 6% to 8% among 18-49 viewers, a bit higher than its historical trend. "The start of the year is going well. Hopefully, we won't end up in liability," says one media agency executive. 

Mediavest's Speciale says the quarter performance for "broadcast will be the ratings story. The season is starting out with ratings declines again. This will determine the inventory available for sale in scatter." 

CBS has the least of the rating declines so far. The hope for buyers is that the network will be more reasonable when it comes to pricing because they have more to sell. 

Another positive for media buyers is that there was very little in the way of makegood spillover from a year ago. That means more inventory is available to buy on a scatter basis -- and possibly at lower prices.