• by April 19, 2001

A new Myers Mediaenomics report predicts a decline in total television upfront advertising sales, which will be off-set somewhat by more money being spent in scatter later in the year. The report states that an advertising recession - defined by Myers as two consecutive down quarters - "looks like an imminent possibility."

The Media Vitality Report points out that while no single quarter through December 2000 has yet to show a decline in total ad spending, certain media have shown drop-offs and appear headed toward recession, Network cable, for example, was down 3.9% during the fourth quarter of 2000, and projected declines for the first quarter of 2001 would make network cable the first media sector to officially be in an advertising recession. Of broadcast network television, spot television, newspapers, radio and consumer magazines, any or all could have a down quarter from January-March 2001, putting those showing negative growth on the verge of recessions by July 1.

Ironically, the report points out, one medium continuing to post strong gains is the Internet - "the medium that some blame for much of the decreasing expectations for the media economy." The report states that, "if anything, the underlying growth in online ad spending is helping to prop up the overall growth in U.S. ad spending."

As previously announced by Myers Reports, the second quarter Advertising Confidence Index (ACI) fell 24% from December 2000. The Advertising Confidence Index was based on a Myers Reports survey of 108 advertiser and ad agency executives responsible for media planning or buying decisions. The Advertising Confidence Index for mid-March was 52.64, a 16.40 point drop - 23.8% -- from an index of 69.04 in December 2000.

Eleven of the 15 media tracked by Myers now have confidence indices of less than 50%. This represents an appreciable downturn in advertising expectations from year-end 2000, when all media had indices of greater than 50%.

A decline of 34% in the network television Ad Confidence Index portends difficult upfront negotiations this spring and summer, according to the report. "This could be bad for the overall media economy," the report states, "because the network upfront historically has been a bellwether for overall advertising confidence."

Two-thirds of total respondents and 71% of advertisers responding to The Survey of Advertising Confidence said they plan to use upfront strategies that increase the flexibility of their media options, including either a greater reliance on scatter buys or higher percentages of upfront buys that are cancelable. Just over half (51.7%) of respondents said they plan to decrease spending in this year's upfront, versus 28.3% who said they plan to increase spending and 20% who plan to maintain the same spending levels as last year.

All that said, CBS's schedule appears to be in the best shape of all major networks heading into the upfront, according to another Myers report, "The Season of Discontent: Forecasting Broadcasters' Plays and Counterplays," which provides a commentary on broadcast-network schedules and marketplace positioning heading into the upfront.

This year is particularly intriguing, the report points out, because the usual programming and scheduling strategy elements are further compounded by threatened summer work stoppages by the Writers Guild of America and Screen Actors Guild. Networks, therefore, must assemble fall schedules as usual, while simultaneously making prime time strike contingency plans.

"The 2001/2002 television season is like no other we've experienced, fraught not only with the strikes, but a shaky advertising marketplace and, ultimately, a shaky economy," said Janet Stilson, senior VP of Myers Reports and editor of the Myers Mediaenomics research reports.

Some excerpts from the report:

CBS -- "Moving into the new season, CBS finds itself in the enviable position of having few critical problems to address. Only its Friday lineup is in shambles, but the network can easily ignite the night by moving 'The District' over from Saturday and pairing it with a similar justice-driven drama-perhaps 'First Monday,' its promising new Supreme Court series."

NBC -- "The good news for NBC this season is that it has managed to remain the number one network among the coveted 18-49 demographic. The bad news is that the network is heading into the upfront season with significant problems on four nights, and nagging if not critical problems on a fifth. NBC is under increasing pressure to develop and program a successful reality series."

ABC -- "Given the seemingly unstoppable success of 'Who Wants to be a Millionaire', it appeared that ABC was positioned to dominate prime time broadcast television for several seasons. Instead, ABC got greedy and blew this golden opportunity in a variety of ways. 'Millionaire' has been a steady, multi-night fixture on ABC since January 2000, and yet, remarkably, the network has failed to launch a single new series behind it during the last 16 months. Further, ABC chose to run new editions of 'Millionaire' throughout last summer, without giving it a rest (except for two weeks of repeats in June). And then the network committed four hours of its prime time schedule to the show during the 2000-01 season -- all but ensuring audience fatigue. Now, ABC must deal with the aging 'Millionaire' as well as its aging comedy franchises. In short, ABC will need a near-total overhaul by September."

Fox -- "Has regained its status as a young adult demographic powerhouse but ought to be doing better. The network has been a mess on Thursday and Friday, despite pronouncements last May that both nights would benefit during the 2000-01 season from quality new adventure and drama shows. Though rarely recognized in the press, Fox' Sunday night roster, which consists of 'Futurama,' 'King of the Hill,' 'The Simpsons,' 'Malcolm in the Middle' and 'The X-Files,' can stand alongside NBC's Wednesday as one of the two best broadcast lineups of the week."

The WB -- "The WB has been so strong this season it faces only one major challenge next fall: the salvation of Sunday night, which has recently bottomed out. The WB is going to have to come up with compelling new programming for its Sunday schedule, because all its veteran series are needed elsewhere."

UPN -- "What is there to say about UPN, except that it is competitive on three nights only, and that its fortunes rise and fall in proportion to the performance of 'WWF Smackdown' on Thursdays? The other two nights on which UPN maintains a respectable presence are Monday and Wednesday."