But they quickly realized that it would run upwards of $30 million.
So in March they took $1 million to the spot market. Targeting women 35 to 54, they ran ads on AMC, Lifetime, Oxygen and The Learning Channel on 142 cable systems nationwide.
"We could have gone national," says Pat Patregnani, president of Zimmerman & Partners, the Fort Lauderdale, Fla.-based Omnicom Group agency that handles the program. "By going in local, we're able to secure much lower rates and build an ROI model with much less waste than with a national model. It made more sense to go local than national. You just can't paint the country with one brush anymore."
For some marketers like automakers, retailers, telcos and package-goods marketers, spot and scatter markets can be the best of both media worlds. Regional marketers don't waste media budgets on national network buys. National marketers can tap local markets for heavier coverage or test items.
All of which continues to fuel a healthy spot market, in which revenue will continue to grow through 2003, according to statistics from the Television Bureau of Advertising. The local spot market should increase upwards of 3%, with national spot revenue growing slightly less, topping out near 2% for the year, TVB reports. In 2004, local spot could grow upwards of 8%, with national spot revenue growing by 10%, TVB says. The growth in 2004 is expected to come in part from national, state and local elections and Summer Olympics.
Already, signs have pointed to a tightening of the spot and scatter markets, notes Richard Cotter, senior partner, USA-director of local broadcast with MindShare, New York. The WPP Group-owned media buying agency handles Ford Motor Co., American Express Co., News Corp.'s 20th Century Fox, Domino's Pizza and a host of other brands including spot and scatter buys.
Since last fall, the market has been tight, leading to costs rising at upwards of 20% to 30%, some estimate. It's counterintuitive, Mr. Cotter says, with the weak economy, sagging consumer confidence and the Iraq war.
"The economy is terrible and the stock market is still in the toilet, and yet advertising is booming," he says. "If you look at it logically, it makes absolutely no sense."
ACTION PICKS UP
With the end of the Iraq war, some see heightened action on the spot market. While the market remains tight and costly, marketers' pent-up ad dollars could be unleashed, says Bonita LeFlore, exec VP-director of local broadcast at Zenith Media Services, New York, owned by Publicis Groupe and Cordiant Communications Group. Moreover, with high scatter prices, local market buying could benefit.
"Everything froze in place with anticipation of war, war itself and the re-expression of dollars that were moved around because of the war," she says. "We have to watch the money coming into spot on a weekly and monthly basis, rather than projecting too far out. It's not a long-range outlook, but it's the only outlook we have."
For some, it presents opportunities. AutoNation thrives on spot buys. With 287 auto dealerships in 17 states, the company runs hundreds of spot ads each week, says Fred Zuckerman, VP-media services with the Fort Lauderdale-based company. Working the upfront for network avails and local markets for spot, AutoNation and Zimmerman & Partners executives try to secure the advertiser's buys early in the year and cut costs, he says.
"As an advertiser, I'm interested in how to drive that dollar further because I'm not increasing my budget," Mr. Zuckerman says.
Some companies supplement network buys with local or regional buys based on ratings, current events or situational need. National schedules don't deliver markets' viewing ratings equally; those that underdeliver often are supplemented with spot, says Sue Johenning, exec VP-director of local broadcast operations with Initiative Media North America, Los Angeles, a unit of Interpublic Group of Cos.
More to the point, client Home Depot uses spot buys tied to special events like sponsored events or new store openings or, sometimes, as a response to natural disasters, she says. For example, when a hurricane threatens a region, Initiative can buy additional local or regional time to run storm preparedness spots. Once the event passes, Home Depot can get off the air quickly. "This speaks to the flexibility of the local spot market," she says. "You can get on and get off locally easier than you can on the national level."
Going local isn't always a strategic move. Sometimes, it's the only move, especially in this tight market, MindShare's Mr. Cotter says. Since January, several large clients have been forced to use local broadcast because the network market was too tight, he says. He anticipates that trend continuing-and accelerating with the coming political season. Already, primaries are set for early 2004, meaning savvy buyers are planning ahead for election year, he says.
"If you don't clear, you don't have an alternative," Mr. Cotter says of locking down time. "The network scatter market was sold out; now clients are turning to spot because it's the only thing they can clear."