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ADWEEK: Advertisers Won’t Abandon TV

Marketers expected to order $2 billion in Q4

Sept 12, 2008

-By John Consoli, Mediaweek


Even in a down economy, TV’s Q4 ad picture looks sharp.

NEW YORK Overall, national advertisers are expected to finalize fourth-quarter prime-time upfront advertising “holds” to “orders” of more than $2 billion.

Despite a troubled economy that is spawning rising retail prices, growing unemployment and record home foreclosures, most advertisers will not abandon national television in the fourth quarter, with just about every marketer planning to spend as much, or even more, than they committed in the May upfront.

Overall, national advertisers are expected to finalize Q4 prime-time upfront advertising “holds” to “orders” of more than $2 billion, with only about 2 percent canceled of the total put on hold during the upfront. The cancellation rate has been about 3 percent in recent and more economically rosy years.

This has respectively confounded and surprised media agencies and network sales executives, who were bracing for a grim year-end.

One major media agency executive said his clients would cumulatively cut 2 percent of their fourth-quarter upfront orders this year, but eliminating one major client who was cutting back more drastically, that cumulative percentage falls to just 0.6 percent. “I was expecting about a 4 percent cancellation rate, so this is surprising to me,” the buyer said.

John Swift, evp, managing partner of activation for media agency PHD, said some of his clients actually are looking to add dollars to their upfront commitments for the fourth quarter, a strategy that also was adopted by other clients and media agencies.

“Fourth-quarter ad spending on broadcast television is looking like it is going to be no different than in past years, despite the economy, and I’m surprised by that,” Swift said.

Rino Scanzoni, chief investment officer for media agency conglomerate GroupM — whose clients spend about 30 percent of the total upfront national TV and cable prime-time ad dollars — summed it up this way, “There will be no carnage of fourth-quarter ad dollars in television.”

Advertisers are increasing their national TV spending across a number of classic categories: movies, retail, wireless, some pharmaceuticals and even packaged goods. And the troubled domestic auto companies are not cutting back as much as observers expected.

One media buyer said he believes the broadcast networks’ ability to offer digital ads as an extension of TV buys also has motivated many advertisers to stick with Plan A. “I sense clients are realizing that TV and digital ads are very complementary, and driving TV viewers to a Web site for more information can help close a sale,” the buyer said. 


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