UPFRONT SUMMIT PREDICTS FURTHER SHIFT TO CABLE

Estimate: Cable TV Ad Revenue to Increase $1 Billion This Year

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NEW YORK (AdAge.com) -- With the TV ad-buying auction slated to start in just days, panelists at the Advertising Age/TV Week Upfront Summit predicted that cable TV is in for a very strong year, as more marketers are seriously considering migrating away from broadcast pricing.

At the meeting, held at the Grand Hyatt

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Hotel in Midtown Manhattan, some participants asserted that cable networks could take in up to $1 billion more in ad revenues than they did last year.

'Continued migration'
David Cassaro, senior vice president for sales and distribution at E! Networks and one of the speakers on the panel, "The Future of the Upfront," said, "We're going to see a continued migration of dollars to cable. It's going to be a lot of money. It'll be closer to a billion that half a billion."

Meanwhile, last week, speaking from their headquarters, several major car marketers vowed to move ad dollars elsewhere if national broadcast networks seek double-digit rate hikes in the upcoming upfront. Some automotive marketing executives said they plan to decrease upfront spending no matter what happens as they strive for a more targeted reach.

The upfront refers to the freewheeling auction that takes place each spring as the TV broadcast networks try to sell between 75% and 80% of their commercial airtime ahead (or "upfront") of the new fall TV season.

In defense of broadcast
In defending the broadcast networks at the summit, Jon Nesvig, president of sales at News Corp.'s Fox Broadcasting, pointed to a study by the Association of National Advertisers that reported marketers' overall advertising budgets are up. In the survey, released in March, 37% of marketers said they would spend more on TV this year, 45% would spend the same and 18% would spend less.

"Broadcast TV may take a hit, it might not," Mr. Nesvig said. Perhaps alluding to the fact that such predictions are premature, Mr. Nesvig said that even the New York Yankees have to see how their recently acquired superstar, Alex Rodriguez, performs before they fit him with a World Series ring.

Closing the gap
Paul Rittenberg, senior vice president for advertising and market research at Fox News Channel, added that the gap between cable and broadcast TV would continue to close in terms of pricing. Mike Shaw, president of sales and marketing at Walt Disney Co.'s ABC TV, who has been aggressively courting media agencies, wondered why people weren't as focused on who was likely to gain share between the broadcast networks rather than looking at a broadcast to cable ratio.

If moving to cable was such a good idea, why hadn't more buyers done it in previous years? he asked.

"It's not that someone is winning and someone is losing," said John Mandel, chief global buying officer of MediaCom, part of Grey Global Group. "Everybody is going up a little, it's not stealing."

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