Commentary

A New TV Ad Marketplace: Add $30 billion?

Now that the TV upfront is over, we can focus on the usual and the not-so-usual: This would be the scatter markets. More strangely, it would also include the absence of TV networks' typical high-flying bravado of years ago.

That's because this season, there was a return of decent price increases in the upfront. The TV networks and programmers have quietly moved on to their next wave of ad business --- all with the hope of gaining perhaps more money in the coming quarterly markets.

Long-term MediaPost columnist Dave Morgan believes there is a lot more money to come.

With all that set-top box data, addressable advertising and coming performance-oriented sales capabilities, there is no reason the current $70 billion TV advertising market couldn't add another $30 billion to get to a big $100 billion total. Many media agencies have been clamoring for this valuable gold mine of data for years -- stuff that would significantly help their businesses, and, of course, those media sellers.

None of this will come soon enough for TV networks, which still rely on pure supply-and-demand models of the marketplace to spike TV revenues. One wonders if these two projections aren't related; TV networks and programmers were somewhat conservative in their price hikes at a crucial time when advertising seems to be threatened by new digital platforms.

Fox started the ball rolling as the industry leader, seemingly setting this year's top-drawer TV upfront pricing of 9% around, which every other TV venue -- cable, syndication, and, supposedly NFL -- has been priced at, or under that mark. (Though NFL price increases, according to other executives, are actually well into the double-digit percent hikes.) At the same time, some TV programmers only tallied 5% price hikes this year.

TV executives aren't just thinking about the long term of coming TV season, but many seasons to come. Who would ruin the chance of raising the anger of big TV marketers, which might increase the pace in sending their money elsewhere?

In recent years, a highly priced upfront market can be followed by a low-moving, usually lower-price scatter market. But if networks executives played their cards right this time, the dynamics maybe changing just a bit -- with some price increases happening in scatter as well.

Maybe there are 30 billion reasons why.

Next story loading loading..