Reading the television tea leaves
Advertising
Talk about failing up. Every year network television audiences get smaller, and the amount advertisers pay to reach them gets bigger. But nothing like this year. In the most frenzied "upfront" market on record, advertisers spent $9.3 billion in just two weeks in mid-May to lock in commercial time for the coming fall season on such shows as American Idol and CSI. That's an increase of 15 percent over last year, and far beyond even the rosiest predictions. "We expected things to move quickly, but the amount of money spent was really a surprise," says Tim Spengler, an executive with ad-buyer Initiative Media. "It just shows that prime-time network television is still regarded as beachfront property."
Entertainment companies with movies and DVDs to promote, big-box retailers like Big Lots fighting for market share, and drug companies were among the biggest buyers. Consumer goods companies such as Procter & Gamble, which have previously relied more on promotion than on TV ads, have also come back to the airwaves. And many advertisers who usually buy leftover time later in the so-called scatter market locked in early instead. The market was so strong that some networks turned money away. It went directly to cable.
Typically, upfront buying is an indication of the overall health of the advertising market. But this year's TV bonanza may mean something different. With overall economic growth sluggish and many advertisers planning only small increases in budgets, some executives believe that television's big payday may be coming at the expense of other media, such as magazines, radio, direct media, and promotion. "That money had to come from somewhere in the existing marketing mix," said Spengler, noting that budgets were locked in before the buying began. And some of it may well end up back where it started. Upfront buys are refundable, and buyer's remorse is as common a part of the selling season as cigars and shrimp cocktail.
That said, what was so enticing this time? Aside from perennial favorites such as Law & Order, Survivor, and Friends, which is expected to be in its last season, advertisers also bet heavily on newcomers Navy CIS, a spinoff of military drama JAG, on CBS; Coupling, adapted from a Brit sitcom about six singletons, on NBC; and The Handler, which stars Joe Pantoliano (now we know why Ralphie got whacked on The Sopranos ) as an FBI agent. Of course, with the majority of new shows destined to fail, the smart money may be wrong--and not for the first time. -Betsy Streisand
This story appears in the June 9, 2003 print edition of U.S. News & World Report.
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