×

Once registered, you can:

  • - Read additional free articles each month
  • - Comment on articles and featured creative work
  • - Get our curated newsletters delivered to your inbox

By registering you agree to our privacy policy, terms & conditions and to receive occasional emails from Ad Age. You may unsubscribe at any time.

Are you a print subscriber? Activate your account.

top 25 agencies by u.s. spot tv billings POLITICS FUELING SMALL PRICE RISE FOR FALL SPOT BUYS: SPOT TV OUTLOOK: POLITICAL ISSUE ADVERTISING PUSHING AHEAD OF AUTOMOTIVE, TELECOMMUNICATIONS

By Published on .

Advertisers making spot buys during the upfront season may see costs staying the same as last year or rising 3% depending on the market. But advertisers who make their spot buys after the upfront ends could see increases as high 7%.

One of the factors contributing to the increase is the time demands expected to be made by political advertisers in markets where elections are closely contested. Issue advertisers as well as candidates are expected to have an impact on the spot market.

AN ELECTION YEAR

Jim Beloyianis, president of the Katz Television Group, says he believes politics is the wild card in spot predictions.

The difference between a hot and cold political season could be substantial on the bottom line, says John Heise, president-CEO of Petry Television, New York. Markets without hot races may have flat revenues; those with hot races may see 7% growth.

"Political [advertising] will have a big impact on pricing, and on supply and demand [during the upfront selling season]," says Mr. Heise.

Peggy Green, exec VP-national broadcast at Zenith Media, New York, says the marketplace is still unfolding.

"The anticipation is the upfront advertiser will do better," says Ms. Green. "But you could buy upfront and the economy changes. What you know now is business has been good, but things can change.

"The trend has been that as the year gets heavier advertisers are looking for long-term commitments in local, as in network. But third quarter for me is part of last year."

Ms. Green says advertisers want to have a choice, and "just because you have an upfront budget doesn't mean you spend it. It just means you can look at the market. The same thing that happened to Bud on the Super Bowl could happen locally."

An advertiser might buy during upfront to get better access to inventory, notes Ms. Green.

"There are some shows where you can buy local exclusivity and buy it from upfront," she says.

The political business this year will be more profitable to stations, adds Mr. Beloyianis, because much of the money going into campaigns this year is from issue groups, rather than candidates.

"This type of issue money is going to continue to grow. And what's interesting is we're seeing issue advertising, whether term limits or tobacco or whatever, being much larger than previously anticipated. That's offsetting the classical political dollars," says Mr. Beloyianis.

TIGHT SECOND QUARTER

Linda Shalen, VP-spot broadcast at CPM Media Management, Chicago, describes the second-quarter spot market as "tighter than a drum" with virtually no inventory available.

Ms. Shalen says second-quarter advertisers are "buying everything and anything -- TV, radio and spot cable. Atlanta has been tight; Miami, you can't even touch. It's a matter of what you are willing to pay for the inventory and what you are willing to pay to preempt the next guy."

She projects her agency's spot buys will increase 5% to 8% for the 1998-99 season. CPM manages media strategies for clients such as Ralston Purina Co.'s Pro-Plan, Kinko's and Luby's Cafeterias, a southern U.S. restaurant chain.

RATES STILL UP

"Typically in the second or third week in June, some of the stations start breaking third-quarter rates -- we are not seeing that because of the high demand on second quarter inventory," says Ms. Shalen. "What we are telling our clients is that a lot of new retailers are going into the markets -- OfficeMax, Office Depot and Circuit City."

Ms. Shalen says the telecommunications industry continues to be hot along with automotive.

"Financials, a category that hasn't been active in the past, has become a competitor for the limited inventory that is available," says Ms. Shalen. "The Southeast particularly is experiencing not only growth from a numbers standpoint but growth from an increase in ad revenues. For example, Kohl's is coming into the market."

AUTO CHAINS EXPANDING

Karlyn Armstrong, senior VP-director of local broadcast at DDB Needham Worldwide, Chicago, expects spot dollars in the third quarter to be up about 5% from a year ago. Ms. Armstrong agrees that automotive and telecommunications are strong categories, along with healthcare and pharmaceutical.

"The big used-car lots -- CarMax and AutoNation -- are expanding, and they're in markets they've not been in before," Ms. Armstrong says.

Beyond that, normal seasonal factors are at play, says Maggie Ross, senior VP-director of local broadcast at Young & Rubicam's Media Edge, New York.

FINANCIAL CATEGORY STRONG

The second quarter starts fast, then slows into May, and the third-quarter spending doesn't heat-up until August and September. As to who is spending, Ms. Ross says, auto dealer dollars are healthy, especially for domestic brands.

"The movie business is very hot," says Ms. Ross, and she says the financial sector is coming back, "thanks to mergers."

"We know Jeep's coming out with a new product that's back-half centered," says Leo MacCourtney, president of Blair Television's station division. Mr. MacCourtney says he senses General Motors Corp. will spend more in the second half of the year.

"AT&T isn't really spending a lot in spot," so spot sellers should expect to see GTE Corp., Mr. MacCourtney predicts.

Hot markets are where you'd expect them, he adds, places like Phoenix and Austin, Tex., with retailers especially strong in Detroit and political spending already rising in San Francisco.

Annette Mendola, exec VP-spot sales at SFM Media, New York, adds Las Vegas, Miami and Raleigh, N.C., to the list of hot markets.

Tampa is something of a mystery. Mr. Beloyianis calls it "surprisingly soft," especially given the strength in Miami, while Ms. Ros says Tampa business has been "picking up."

Other soft markets, says Mr. Beloyianis, include the mid-sized Tennessee and Ohio markets.

Cindy Clements, director of local broadcast for TBWA Chiat/Day in Dallas, says pricing in major markets like Los Angeles and New York also has been fairly flat.

Don't ignore the seasonal patterns either, she adds. "Movies are usually big in the third quarter. So is fast-food," says Ms. Clements.

REGIONAL PATTERNS

Mr. Heise also has seen the regional patterns, but says markets must be considered on an individual basis.

In New England, for instance, "Spending dropped dramatically during the winter" in Maine and New Hampshire. But Hartford/New Haven, Conn., "has been one of the strongest markets in the region."

Despite the regional variations, however, the standard rules apply for spot TV buyers.

"I would say 70% of our activity has been placed upfront, for the whole year," says Pete Stassi, senior VP-local broadcast at BBDO Worldwide, New York. "Anyone buying late might run into a problem."

And if national upfront buying turns soft, the spot market won't look good either, says Jerry Solomon, president-national broadcast for SFM.

"What I see going on with national is not that rosy," he says.

In this article:
Most Popular