Olympics, politics put on squeeze

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Media buyers looking for bargains in spot TV are out of luck.

Politicians, auto dealers, dot-coms and retailers have snagged much of the inventory, says Bruce Kuperschmid, president of Broadcast Time, a Lido Beach, N.Y., buyer that places 55% of its $25 million in billings on spot TV for clients such as Warner Books, Simon & Schuster and the Fashion Institute of Technology.

"It looks good if you're a station, not so good if you're a buyer," he says. "We find [big-ticket] markets we bought three or four months ago [that] when we go in now, it can be 50% to 70% higher. If you wait until the last minute, you'll get murdered."


The only hope Mr. Kuperschmid sees for buyers is the chance that dot-coms, whose stocks took a hit in April, may cancel some of their buys. But "there will be enough of them that with everything else going on it will be a rough road ahead," with final cost increases more than 10% year-to-year.

Spot prices are on the rise, agrees John Heise, president-CEO of Petry Television, a division of Petry Media Corp., New York, which places more than $2 billion in ad time a year -- all spot -- for 225 clients. "Our increases will be double-digit the second half of the year based on Olympic revenue, political spending and dot-com in the top 10 to 20 markets.

"The automotive [sector] has been strong. We've seen the telcos spending money, retailers, and fast-food was up some."


What really has stations licking their lips, however, is the coming political season (see related story on Page S-38).

"They're saying [presidential candidates George W.] Bush and [Al] Gore are neck and neck. There is going to be spending," says Christina Mantoulides, senior VP-director, regional buying operations for TN Media, a unit of True North Communications in New York.

Politicians represented $400 million in purchase power during the 1996 cycle, says Ms. Mantoulides, who adds that this year should be even better and not just because campaigns have raised more money. "Advocacy groups should be a good source for local stations."

Abortion, gun control, tax issues and state initiatives will all drive spot TV spending upward, predicts Michael Hugger, president of Katz Media Group, New York.

"We're still saying it will be an 8%-to-10%-plus year. For some markets, it's going to exceed that, based on political revenue in the market."

The problem with political spending is it's not uniform, either among markets or dayparts, Ms. Mantoulides adds. "It's not in every market. It's not on every station. The politicians want a certain audience."


While politicians spend most heavily for news programs in states with tight races, dot-com companies look for big markets and big audiences, says Mr. Hugger.

"We don't expect it to spread too much into medium and small markets. It's still mostly a major market phenomenon, and in selected markets. It's Washington, Seattle, San Francisco and New York, those are the major markets. Boston is heavy," also, he says.

Dot-coms were huge contributors to growth last year, he adds. "In some markets, they represented 25% of dollars on some stations" during the fourth quarter of last year. "They are buying the highest profile, biggest ticket items."

Lena Mills, VP-associate local broadcast director in Zenith Media Services' New York office, says, "2000 is definitely going to be a healthy year for everybody. There are some bargains [out there]. The small markets are a good deal."

But some markets where you might expect bargains may not have them due to local economic factors, Ms. Mills says.

Texas, for instance, isn't expected to be politically competitive, but it's a hot area because of growth in the Hispanic market, she says. "That's where you need to be to reach that market."

Even if spending by dot-coms falls, there are new buyers to pick up the slack, Mr. Hugger says. "The prescription drug growth will continue," even for spot TV, he says.


In past years, direct-to-consumer drug advertising "has been more a player for network. We're trying to get them more into spot than they had before," Mr. Hugger says.

Ms. Mills agreed. "It's a category you didn't see three years ago. [The pharmaceutical marketers are] more willing to talk to consumers and not just go to the medical side."

Veteran advertisers aren't backing off, either, says Mr. Heise. Auto dealers are perennially strong, but now "we're seeing a lot of spending by the foreign operators," like Kia Motors America.

Overall, however, Mr. Heise summed it up: "This should be the best year for spot TV in a decade."

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