TV's Scatter Market Frozen for Second Quarter

Marketers Holding Back as Networks Refuse to Lower Prices

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NEW YORK (AdAge.com) -- The second-quarter market for TV advertising appears frozen, according to media buyers, who suggest marketers won't be willing part with their dollars until the very last minute.

The industry's been in a bit of a swoon as of late, with advertisers pulling back between 12% and 14% of their "holds," the second-quarter ad time they earmarked last May with dollars committed during the annual "upfront" sales session.

Now the question is how many of those dollars will come trickling back in the scatter market, where ad time is purchased on an as-needed basis, much closer to the time an ad airs.

"Broadcast nets are still dealing with Q2 cancellations -- I heard they are over 10%," said Marci Ryvicker, a media analyst with Wachovia Capital Markets. She noted that "the scatter market has really pulled back. Advertisers want to wait and see what happens to the economy before they commit, and there are a lot of other alternatives. The only network really bullish is CBS."

Buyers and TV networks bicker over price and ad time every year, but this impasse is a little different. With the economy still flailing, more advertisers are being very particular about how and when they spend their dollars. "A lot of people are looking to the second quarter as a sort of indicator" of how ad time will be sold "moving forward," said Andrew Donchin, director-media investment at Aegis Group's Carat.

That could mean waiting until April. At present, buyers and sellers are in a "stare down," one media buyer said. "Unless you have a good reason to buy second quarter today, there's no reason to buy second quarter today," because prices aren't going up, and marketers are increasing pressure to negotiate them down, the buyer said.

Meanwhile, networks are steadfastly refusing to roll back prices on ad time. That means advertisers could simply hold their money until the weeks in April, May or June when they really know what they need and how much they have to spend.

The situation augurs a particularly difficult third quarter ahead. Where marketers were supposed to indicate the amount of their upfront cancellations for the second quarter by January, negotiations were allowed to proceed into March. Typically, the window for third-quarter options cancellations opens in early April, but chances are networks will once again grant extensions in the hope clients will keep dollars with TV, not in their own coffers.

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