When Will Digital Enter TV's Scatter Market Mix?

The TV upfront business came in more or less as predicted, with modest price increases for national players. Now comes the usual next mystery: Whither the scatter markets?

Group M downgraded its global and U.S. forecast with a note that TV ad revenues may have peaked -- because Internet advertising, or the growing segment of Internet video advertising, could ding any further overall rises.

Traditionally, following average upfront price increases, national advertisers would probably pay modest scatter hikes of maybe 4% to 10%. In the upfront/scatter gamble game, some marketers hold back money because... who knows what may happen?

Estimates are that CBS pulled in the best upfront results, with perhaps an 8% hike in cost-per-thousand viewers. ABC and Fox were next with 6% to 7%, followed by NBC with 5%.



On the cable front, some media buyers say the NBC Universal slew of networks got pricing up in the 8% range, with Turner Broadcasting’s networks just a tick behind at 7% to 7.5%. Top-rated syndicated programmers got 5% hikes on returning talk shows, but one veteran media buyer reckons the many mid-level shows were in the 1% range or flat.

Overall, the national upfront plunked down around $21 billion, out of overall TV dollars sitting at around $60 billion to 70 billion. Where does Internet video fit in? Down the list at perhaps around $2.5-$3 billion, according to some estimates.

If Group M predictions come to be, I'm guessing the first damage to any national TV media process for networks and programmers will happen on the scatter level.

With many national advertisers looking to make last-minute decisions -- and scatter deals still pegged without guarantees -- some of that money may move to the Internet.

But the initial dollars won't go to less-than-professional or original, short-form Web video series. Instead, the money will flow to "premium" video areas like Hulu and network video app destinations that are controlled by the big network players. This means advertisers will just be shifting dollars from one pocket to another.

With digital video providers already complaining about the "scarcity" of premium, this echoes the theory that traditional TV advertising is all about desiring the precious few big-rated programs. Digitally, areas like preroll can be pricy alternatives to the rest of the Internet.

Considering the efforts Nielsen is making to merge traditional TV viewership metrics with Web video, one can only imagine that the next wave of TV deals will have a strong Internet component. That will reveal itself in scatter market activity.


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