• by Wayne Friedman , May 14, 2010

The TV upfront advertising market is looking to return to its old ways. With broadcast ratings erosion around 8%, cable network ratings erosion down 3% for some of the bigger networks and the TV advertising upfront demand increasing by 10%, according to estimates, all signs point to a TV marketplace similar to the 1980s and '90s: a hot and early upfront sales period.

"After presentations end next Thursday, they are going to get right into it," says Larry Novenstern, media consultant for The Leverage Agency and former TV buying executive for media agency Optimedia International U.S. "The inventory will go."

Last year, the upfront advertising market didn't occur until the last week in July. Most marketplaces take place in late May or early June time frames. As in strong markets of the past, Novenstern says, "There'll probably be a few late nights this year." Some of the hot markets of the past saw the broadcast part of the upfront being completed in just three days.

"It will be much faster than last year," says Aaron Cohen, chief media negotiating officer for Horizon Media. But some network ratings declines, especially on cable, "may make negotiations go on a bit longer."

Another reason for the market to move faster: Ratings erosion has hit cable networks; it started a few years ago with some bigger nets. That means there are fewer places for advertisers to secure top prime-time advertising inventory, Novenstern says.

Network selling executives have already been talking up big double-digit CPM increases -- at least 10% or more -- due to the scatter market, which has seen 25% increases over last year's upfront prices.

In 2009, the broadcast prime-time market was pegged, according to estimates, at around $6.2 billion to $6.5 billion -- down almost 20% from the year before. Cable's upfront, which is calculated for all dayparts including prime time, was down 12%, approximately $6.6 billion to $6.8 billion.

With network ratings down 8%, and the expectation of 10% more upfront money, a rough calculation could mean an 18% hike in CPMs. That is not likely to happen, say media buying executives. But hikes of around 8% to 10% are possible.

Strong prices could shake out some lower-level broadcast upfront TV marketers, too.

Ira Berger, director of national broadcast for the Dallas-based The Richards Group, says some of the broadcast upfront advertisers -- those that have $3 million to $5 million to spend during the upfront selling period -- may abandon broadcast in favor of just buying cable networks.

All this will occur, he says, because of price hikes and harder-to-get prime broadcast inventory. Where the price for a thousand viewers in the 18-49 demographic could be around $30 on a broadcast network, cable networks can be priced around half of that, at $15 CPMs.

Still, Horizon's Cohen believes better-priced deals for those broadcast-inclined advertisers will be available in other dayparts -- such as late night, sports, daytime and early morning programming.