Marketers Still Holding On to TV Dollars

Third-Quarter Upfront Options Remain Open Past Deadline

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NEW YORK ( -- Marketers are continuing to hold their money close at hand, creating a foggy outlook for TV-ad buying. The traditional deadline for approving third-quarter upfront options for broadcast-TV ad buys has come and gone, but few marketers have approved that money for order, according to media buyers.

The dynamic suggests that advertisers are following the pattern they created for second-quarter options -- waiting until weeks after the normal deadline to decide whether the money they committed in last year's upfront should continue to stay in the market or if it should return to their own coffers, where it can help bolster their own finances. For the second quarter, many marketers canceled 10% to 15% of the money they had previously earmarked for ad time, ad buyers said.

"Third-quarter options are absolutely not done," said one media-buying executive. In a normal year, options would have been decided upon around April 1.

Scatter easy to come by
The slower marketplace comes as buyers find that scatter advertising, or ad time purchased much closer to air date, is relatively plentiful and available at or below price floors set during last year's upfront marketplace, when networks sell 75% to 80% of their ad inventory for the coming TV season.

"We think post-Easter, inventory has opened up, pressuring scatter," analysts from Wachovia Capital Markets said in an April 22 research note. "Scatter rates remain weak in early 2Q, trending slightly below upfront rates for cable and broadcast, compared to flat to up slightly a few weeks."

The situation is cause for concern among media outlets. When marketers fret about economics and whether they can afford to spend money on TV advertising, it reduces networks' marketplace leverage. Instead, said one buyer, "the networks aren't pressuring. In a more robust scatter year, networks will call you and say, 'You've hit your deadline. You have to tell us or we're assuming you're taking options.'" Instead, the buyer said, "this time they don't have that lever."

Another issue: Advertisers are taking longer to decide their media needs, which could slow down the next upfront season. By this time of year, media buyers normally have a sense of client budgets for the upfront, but several buying executives said instead they are still working through second-quarter and third-quarter issues. "We're still trying to work on where we are going to go in terms of third quarter," one buying executive said. "There are lots of questions. It's still a little early [to know about upfront commitments]." Clients are "waiting until the last minute to make any sort of commitment."

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