• by Wayne Friedman , February 15, 2007

TV's second-quarter advertising market--always a harbinger of possible forthcoming upfront activity--seems to be taking a cue from its healthy first-quarter business.

Larger cable networks are rumored to be getting single-digit percentage pricing increase on the cost-per-thousand viewers (CPMs) in first- and second-quarter scatter over upfront deals made last June.

Smaller cable networks with higher ratings growth are witnessing even larger gains.

"I can't remember when we had this much money working on Feb. 14," says Bill Abbott, executive vice president of advertising sales for Crown Media Holdings, Inc., owner of the Hallmark Channel and Hallmark Movie Channel.

To be fair, Hallmark's performance may be somewhat unusual, with ratings up strongly over a year ago. Abbott also notes that his price increases have been working off of low bases.

Turner executives confirm that the second quarter appears to be "steadily" moving on the same track as the first quarter. Another cable network ad sales executive was a bit more cautious: "It's too soon to really tell. But cancellations are low, and that's a good sign."

Abbott more or less repeated what he told MediaPost previously regarding the status of first-quarter business: "I'm very surprised that it's this strong." He adds: "We are a third of the way where we need to be--we are writing really good business."

Still, Abbott says this may not translate into a strong upfront market--noting, as others have done, that many advertisers are just shifting their buys this year from the upfront deals of last June to individual quarter-by-quarter scatter deals this season. While volume is strong in many areas of the business, pricing is only up modestly, showing single-digit percentage pricing increases.

Gary Carr, senior vice president of national broadcast for TargetCast TRM, observes: "I suspect second quarter is going to be healthy, as was the first." Right now, he says, the market for network early-morning and late-night programs is sold out, with most of prime time on the networks sold out.

Abbott says he is seeing strong business from retail, telecommunications, and financial-services categories in particular. Carr says pharmaceuticals are now looking to spend more on national TV.