Jungle Warfare: Good News For TV Ad Sellers Despite Rough Economy

The jungle of the upfront TV market is clearing, while that of the overall economy is growing more vines.  

On the surface, the two are going in opposite directions.  Perhaps TV networks have better guides.

TV's upfront posted 9% gains for its core program pricing metrics, with anywhere from a 1% gain in overall network advertising revenue (to $9.2 billion), to an 8% improvement for cable network advertising coffers (to $7.8 billion).  Even throwing in the caveat that the upfront is essentially a futures market with various expiration dates over the next 12 months, it all sounds like good news.

The movement in the economy -- from housing to oil prices to the stock market -- tells a different story. For example, last September when the broadcast TV season began, the Dow Industrials was at around 13,700. It was at 11,800 on June 24 -- which means it has fallen 14%.



All the while, the national TV advertising market has climbed -- in quarter by quarter scatter business -- by at least that much.  Now, for the upcoming season, big consumer advertisers have added fuel to the fire. They'll pay an additional 7% or 9% or so in program prices in the hopes of avoiding even higher scatter pricing during the year.

Media economists will tell you that overall economic health has nothing to do with the way TV sells the bulk of its advertising time. Then again, at the same time, similar experts will say that television is still the most powerful medium to sell products.

Experts say that when consumer product marketers are in trouble -- or in recessionary times -- they need to spend and market more. After all, consumers still need to eat, buy clothes and drive cars -- no matter if gas is $6 a gallon and the value of homes is 30% less than what it was four years ago.

Consumer confidence may be at a 16-year low right now, according to the most recent data. But for national TV advertising salesman, confidence couldn't be higher. The Internet isn't eating into their wallets -- not yet, anyway. They can still get reservations at Ago in Los Angeles or Gramercy Tavern in New York.

Perhaps we need to look at it more microscopically, at least for two commodity categories: Oil, like broadcast rating points, is seemingly in short supply. But those aren't the only factors to consider for the long term. There's solar and wind power, on the one hand.  There's cable programming, YouTube, Joost, Hulu, and Veoh, on the other. Somewhere at the intersection is the answer.

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