Cable is likely to have increased between 10% and 15% to $7.5 billion, up from last year's take of $6.9 billion, while syndication will post a 4.5% increase to $2.4 billion, according to several key buyers, sellers and analysts.
Gains without pain
But unlike the broadcast networks, which increased their totals by selling more of their inventory during the "upfront" sales period than they did last year, cable and syndication each saw significant hikes in pricing to post high-single-digit increases without giving up too much ad time for valuable inventory in fourth-quarter scatter and beyond. "Scatter" refers to advertising that is purchased closer to the time it airs, usually for a premium.
With cable ratings up 9% during this year's prime-time season (vs. broadcast's 2%), it's not too surprising that more marketers turned to top-rated networks for alternatives to broadcast levels of reach. Syndication, which went into the upfront with flat-to-2% ratings increases, has also upped its multiplatform offerings for advertisers looking to extend their association with top-rated talk shows.
On the cable side, the Turner Entertainment networks (TNT, TBS and TruTV) kicked off the marketplace several weeks ago and are expected to finish the cable upfront with some of the highest increases in cost-per-thousand viewers, in the 9% to 10% range. Turner is followed closely by NBC Universal, MTV Networks and Lifetime, each of which posted average CPM boosts in the 7% to 9% range. Key categories boosting their spending in this year's cable upfront include automotive, retail and financial services, three categories that were largely down in broadcast.
Cable, which typically takes anywhere from one to two months to complete, is closing business in half the usual time this year, thanks to increased demand and a largely solid transition to commercial ratings. One key buyer said 85% of the networks have improved their retention vs. a year ago. "I guess that's a good thing for all of us," this buyer said.
In syndication, major network groups such as NBC Universal, 20th Television and Warner Bros. Television are booking CPM increases in the 5% to 7% range, with higher single-digit increases for top-rated shows such as "Oprah," "Dr. Phil" and "Ellen." Part of syndie's growth this year can be attributed to its pitch as an alternative to broadcast prime for major categories like automotive and retail. "We're not looking to take 100% of anyone's budget," said one key syndication seller. "We remind them that women buy autos, and there's plenty of opportunities in syndication, as well as ways to integrate brands into shows."
Such shifts from broadcast to cable and syndication from recession-plagued categories are the latest sign of marketers looking for more-efficient media buys at a time when fourth-quarter media spending can best be described with a giant question mark. "People are worried that the typical advertisers who at least are displaced from TV advertising are not going to spend elsewhere in media. They may just hold back their dollars altogether," said Marci Ryvicker, a media analyst for Wachovia.
Plus, with the impending presidential election on the horizon for the fourth quarter and NBC's Olympics coverage not selling as well as anticipated, there's a lot of outstanding issues in scatter left unresolved by the broadcast upfront.
One major media buyer added that advertisers have a closer eye on how their competitors are approaching their media spend. "The last thing you want to do is start cutting your TV budgets when a competitor does not. I just think as much as we are migrating over to the digital world and more dollars are going there, I still think TV is doing heavy lifting for a lot of advertisers."