The trio are contributing to what one veteran media buyer estimates is a 10% overall cutback in national TV dollars for the period in the aftermath of a red-hot upfront.
"Based on what I heard, there is a lot of sell-off in the second quarter," said a New York media executive. "We have a bunch of people seeking relief." Networks usually allow advertisers to trim 50% of their media buys during the quarter.
"The cutbacks are generally greater than last year, but you had a much bigger upfront," according to another major TV buyer.
Sensing the strong economy wouldn't last through the year, many networks oversold much of their inventory -- believed to be 80% to 85% of total supply of commercial time -- in the last upfront advertising sales period. Networks usually aim for a 70% to 75% level. Many received boffo 15% to 35% price increases over the previous year's programming, resulting in a record $7 billion upfront market.
The scatter market also has been more robust than anticipated with advertising deals done at double-digit percent price increases over upfront pricing.
"It's still a strong market," said a Midwest media buyer. "But now it is just a normal scatter market."
Network advertising executives either declined comment or didn't return phone calls by press time.
ABC could be one factor influencing the softness. According to advertising executives, there are more gross ratings points in the market because of the network's high-flying "Who Wants to be a Millionaire" game show. This has slightly increased supply over demand, said the New York media buyer.
Other networks' inventory supply, however, is tighter. Fox, because its ratings are down considerably, has given over much of its unsold inventory to make-goods. NBC audience numbers are down slightly, putting it in a similar position. CBS ratings are at about the same level as a year ago.
Both media buying and selling executives note this time of year is a key period to jockey for position before upfront negotiations in May and June. Second-quarter activity has been customarily used as a key indicator in how strong the upfront ad sales season will perform.
In the case of P&G, which is said to have slashed $30 million in second-quarter buys, the cutback could anticipate an earnings hit for its fiscal year ending June 30. Last month, the company told analysts it expected first-quarter earnings to fall short of forecasts because of heavy marketing support behind the rollout of Physique haircare products and Mr. Clean Wipe-Ups.
UP AND DOWN
As for GM, a spokeswoman for GM's North American advertising and marketing department said, "Some of our vehicle divisions are up in TV buys in the second quarter and some are down. If you averaged it out, we might be down a little bit, but it's not unusual since budgets vary by quarter." Estimates weren't available for its spending cut, but buyers said it was less than $30 million.
MCI WorldCom is believed to have trimmed its budget in the quarter by $30 million.
Contributing: Jack Neff, Jean Halliday and Beth Snyder Bulik