• by Wayne Friedman , September 10, 2010

The fourth-quarter TV market mysteriously continues where the upfront market left off -- very hot.

TV broadcast and cable networks have been asking for massive double-digit percentage increases above what TV marketers have been spending in the upfront market. Media agency executives say there are 20% and greater CPM price hikes for prime time, and especially daytime.

"I'm a bit surprised there is so much activity," says Gary Carr, senior vice president and executive director of national broadcast for media agency TargetCast TCM.

Media buyers are surprised that such pricing can exist in a mediocre-performing economy, and against usual trends.

Ira Berger, director of national broadcast for Dallas-based The Richards Group, says typically strong scatter markets are followed by strong upfront markets. They, in turn, are followed by weaker scatter -- especially in the fourth quarters, which start the broadcast season.

"Given the strong scatter market of a year ago, more than a lot of people would have thought, 'I'm going to protect myself and overbuy in the upfront,'" says Berger. "But that doesn't explain the fourth quarter."

Targetcast's Carr says this is a continuation of the overall strong 2010 calendar-year marketplace where a strong first- and second-quarter market was established. That momentum was sustained into the upfront ad market for the upcoming 2010-2011 broadcast year, where networks registered high-single-digit CPM rate hikes.

That said, media analysts say the 4Q market is just beginning -- and may not last. Carr says a better indication will be whether the money sticks into the first week of October.

Longer-term, he points to activity around first-quarter 2011 options, where TV marketers can cut back on their upfront buys. That begins in early December. In the first quarter, national TV advertisers have the option to cut back on 25% of their upfront TV advertising commercial purchases.

If options remain low -- that is, if TV advertisers keep the bulk of their upfront TV purchases -- the scatter market could remain strong through the better part of next year, according to TV media-buying executives.

The daytime market, in particular, is very strong -- which includes many syndicated television shows, such as the market leader "Oprah Winfrey." One possible explanation is the lower number of daytime network gross ratings points, which is being chased by modest demand.

Concerning "Oprah," ending after a 25-year run, media buyers say CBS Television Distribution, which sells the show, is pushing for high increases as well as extended media buys into the distributor's other syndicated programming.

One possible reason could be the unusual recovery process with the economy. Even with the slow, growing health of the company, TV media analysts say TV marketers may be looking to protect their market positions -- possibly with the belief that the economy's recovery will begin to move at a faster pace.