What's Left in Scatter? Not Much

Retailers Have Broadcast Inventory Plucked Clean, Leaving Buyers in Crunch

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NEW YORK (AdAge.com) -- After almost a year and a half of uninterrupted "just-in-time" buying, advertisers are suddenly facing a crunch, with many media-agency executives reporting a near absence of quality inventory on the broadcast networks for November and December.
NBC's additional airtime in a tight scatter market could be coming from a canceled show such as 'Kidnapped.'
NBC's additional airtime in a tight scatter market could be coming from a canceled show such as 'Kidnapped.'

The eight weeks prior to the end of the year, known as the "hard eights," are typically busy because of the holiday season, but as MindShare's co-president of national broadcast, Shari Cohen, put it, "the retailers' avails have just sucked up the inventory."

Jostling for airtime
Jewelry retailer Kay has begun its holiday push, jostling for airtime against Macy's, which is fielding a spot starring Clinton Kelly, of TLC's "What Not to Wear." Old Navy, Wal-Mart, Kohl's, Target and electronics retailers Best Buy and Circuit City also have an on-air presence.

John Moore, a senior VP-group media director at Mullen's Media-Hub, who buys for XM Satellite Radio, Match.com, Lending Tree and Wachovia, said viewers are about to see a major push in the digital-portable-music category with Apple, Microsoft, and XM and Sirius Satellite Radio all touting their products. Microsoft will unveil its own portable music player, Zune, this week.

"It's been a buyers' market for the last 18-24 months, and there's that mentality on the client and buyers' side that you can pull a rabbit out of a hat because that's what we've been able to do," he said. "The reality is, from Black Friday [the day after Thanksgiving] until Dec. 12, it has bucked that trend. Hopefully, it didn't catch anybody by surprise."

New spending from big pharma
A number of media buyers speculated that pharmaceutical companies are buying more heavily, and one media-agency executive suggested the category was emerging from a period of tougher regulations that left them with only a vague sense of what they could and couldn't say. Add that to the seemingly omnipresent ads for autos, movies, phone giants and financial services -- and all the vodka and liquor brands on cable -- and you've got a yuletide log jam going on.

One problem for marketers is a lack of ratings points at Fox, NBC and the CW. ABC and CBS are faring a little better, according to some buyers. Fox was an extremely popular buy during the upfront and boosted its take to $1.8 billion, selling more inventory than usual. Fox had a poor World Series matchup between Detroit and St. Louis and has had a tough fourth quarter against its rivals, leading some to suggest the network might have to transfer clients' sports buys into its regular prime-time lineups.

News Corp.'s chief operating officer, Peter Chernin, alluded to the tight inventory in last week's earnings call. "We certainly feel pretty good, and we sold a lot of our volume in the upfront, so we don't have a tremendous amount of scatter right now." He added that scatter pricing for remaining inventory was running at low to mid single digits above upfront rates.

On ABC's earnings call last week, executives described scatter as "solid," with first-quarter scatter sales and prime-time costs-per-thousand pacing ahead of 2006 upfront levels by low to mid single digits.

Finding time
While NBC is doing better than last year, much of its ratings bounce is coming from "Sunday Night Football." That means it could be making additional airtime available for advertisers who were betting on some of its critically acclaimed shows such as "Studio 60," which has not lived up to expectations, and "Kidnapped," which has been canceled.

The CW is also having a tough time, according to buyers, and is discussing additional deficiency units, commonly known as make-goods.

The lack of quality inventory extends to cable, where high-demand channels such as Bravo, ESPN, TBS, TNT and VH1 are already heavily sold. According to buyers, pricing is running 3%-5% above upfront levels (1%-3% in cable). Outgoing Viacom Chief Financial Officer Michael Dolan said fourth-quarter scatter advertising has helped the company pace 16% ahead.

"I am definitely getting the sense that it is tightening up," said Shelley Watson, VP-director of entertainment at Rubin Postaer and Associates. The agency represents movie studio MGM. "I'm starting to get the feeling that November could go out of sale at certain [cable] networks."
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