By the time all the deals are settled, national TV spending for the 1995-96 season is likely to surge to a record of nearly $15 billion, Advertising Age estimates.
That's spurred in large part by a 27% surge in the upfront network prime-time market to $5.7 billion, with rates for that daypart rising an average of 20%.
A sampling of top advertising agencies suggested about 10% of the money budgeted for national TV hasn't found a home-either because marketers balked at paying the prices or because there was simply no more commercial time available when upfront buys were concluded.
Based on the total national upfront TV market of $12.3 billion, unspent budgets could account for as much as $1.2 billion.
"There's no question that it is a robust market," said Jack Myers, president of Myers Communications, Parsippany, N.J., a media forecaster. "It's not as robust in all media as the drama of the upfront would suggest, but there are nice increases across the board."
Ad Age estimates non-prime-time network upfront buys at $1.8 billion in syndicated TV; $1.5 billion in upfront cable network; $1.1 billion in network daytime; $725 million in network news; $500 million in network late night; and more than $1 billion in network spots. Upfront represents about 85% of the season sales. Another $600 million-plus will be spent during NBC's Summer Olympics coverage.
So, who's got money left? As far as the heavy spending in the upfront, automotive, entertainment and telecommunications drove a lot of the action.
Jon Nesvig, president of sales at Fox, pointed to healthcare products as well. He said Procter & Gamble Co.'s Aleve pain reliever, and a range of new brands based on previously prescription versions of the antacid Tagamet, each will have consumer ad budgets of more than $100 million.
"You have the telecommunications war continuing. The software guys are taking off," Mr. Nesvig said.
As for cars, which have been fueling increases in both national and local TV spending, as well as magazine ad pages, Mr. Nesvig doesn't believe a dip in sales later this year would hurt spending. "If anything, Detroit tends to increase spending when times get tough," he said.
Another catalyst may be fast-food spending, spurred by McDonald's Corp.'s shift of about $150 million in spot TV buys to national TV. The move is believed to have precipitated similar moves by competitors. While traditionally most TV money stays inside the TV loop, media directors still expect millions to move to other media, including radio, magazines, newspapers, outdoor and promotions.
But many media were seeing good gains even before the upfront was completed:
Daily newspapers' first-quarter ad revenue hit $7.8 billion, up 6.7%, the Newspaper Association of America said. National advertising was up 2.2%, retail was up 4% and classified was up 12.6%.
Consumer magazine ad pages through May totaled 84,878, up 7.9%, while revenues gained 14.4% to $3.5 billion, Publishers Information Bureau reported. The fastest-growing ad categories were food, computers, media and publishing, and automotive.
Local and national radio spot advertising rose 13% for the first four months to $1.757 billion, the Radio Advertising Bureau said.
First-quarter outdoor revenue was $400 million, up 10%, the Outdoor Advertising Association of America reported last week, driven by automotive, TV and tobacco (see story on this page).
Where the overflow from upfront will go depends on the category and the product.
"Cars are not going to spend lots of money in women's service magazines, but package goods might," said Jerry Dominus, senior partner at J. Walter Thompson USA, New York.
Radio also expects to reap some benefits from the tight TV market. "People are still in the process of negotiating, but there probably will be a trickle-down effect," said Leslie Strum, VP-associate director of network radio, Media Edge.
Promotion marketing, difficult to define and measure, is another likely beneficiary. Food and package-goods marketers such as P&G, General Mills, H.J. Heinz Co., Pillsbury Brands, Del Monte Foods and others have become particularly enamored with this form of marketing that often brings in supermarkets and mass merchandisers as co-marketers.
Surprisingly, most media buyers think the current TV market will do little to divert more funds into interactive and new media.
"It's getting some, but new media is still looked on as experimental," Mr. Dominus said.
Direct mail ad expenditures have been pegged to grow 7.5% by McCann-Erickson Worldwide guru Robert Coen, but rising postage and paper costs appear to be countering any shifts so far. The number of third-class mailings nationally March 4-31 declined 1.2% to 5.5 billion pieces, the U.S. Postal Service said.
Even if the dollars don't directly transfer, the TV upsurge is seen as encouraging for other media.
Jerry Kaplan, VP-magazine group sales for Meredith Magazines, said he's seen no immediate movement to print. The tight TV market "if nothing else, is an indication that business will be strong because advertisers are investing in brands."
One of those who has already seen some activity is Patricia Haegele, VP-general manager of the Newspaper National Network, which offers one bill for multiple daily paper buys. "The upfront cost escalated and the availability is now gone," she said. "This gives us a golden opportunity."
"Some of those monies will probably be applied to print and other media," said Michael Clinton, senior VP-sales and marketing at Conde Nast Publications. "It's too early tell how much."
"There's a theory that there could be more money for print, but it's not coming about that quickly," said Mark E. Goldschmidt, VP-director of corporate marketing and sales at Hearst Magazines. "Once the upfront is done, advertisers start trying to figure out what to do with the rest of their dollars."
There could still be a major change by fall.
"If there has been excessive hype [surrounding TV], people may be overbuying and a lot of inventory could be released in October," said Harry Glass, senior partner at Bozell Worldwide, New York.M
Contributing to this story: Michael Wilke, Kate Fitzgerald and Laura Loro.
Hot, hot, hot
Media spending is sizzling this year.
1st-quarter daily newspaper ad revenue:
$7.8 billion, up 6.7%
Upfront network prime-time buys:
$5.7 billion, up 27%
Consumer magazines, Jan.-May:
Ad pages up 7.9% to 84,878;
revenue up 14.4% to $3.5 billion.
Local and national spot radio ads,
Jan.-April: $1.75 billion, up 13%
First-quarter outdoor revenue:
$400 million, up 10%