TV Upfront

Auto Recovery to Yield Record Prices at TV Upfront, Trickle-Downs for Other Media

Moody's Predicts Windfall for TV, Smaller Effect for Others

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Many media companies expected better ad sales in 2012 than they've seen so far, but rebounding car and truck sales are poised to create an "advertising windfall" this year, according to a new report.

"We expect auto sales will rise 9.3% this year," Moody's Investors Service said on Tuesday. "Accelerated growth in new-vehicle sales will be driven by pent-up demand following recession-fueled declines as the U.S. economy slowly improves."

Japanese automakers may also spend more as the recover from last year's earthquake and tsunami that disrupted the industry there.

That will mean record prices in television's annual upfront market, when major advertisers negotiate for time in the upcoming season, and in the second-half scatter market, where advertisers buy time closer to the air date, Moody's said.

Radio, outdoor, magazines and newspapers will benefit to a lesser degree than TV, according to Moody's. "TV is the most effective medium for auto advertising and has a fixed level of inventory that magnifies the pricing impact of higher demand," the report said. "Radio, outdoor and print have more variable inventory available, and therefore their ad rates will benefit less from incremental political and Olympics-related spending."

Other media may pick up new spending from "low-end" TV advertisers pushed "down market" as TV rates rise, Moody's said.

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