The yin and yang of TV ad pricing

May 13, 2008

shaw.jpgWhy have prime-time network TV advertising prices been so strong in the scatter market — up in the double digits — after a rather lackluster upfront in 2007?

ABC’s head of sales, Mike Shaw, offered a few answers for the discrepancy between the shorter term scatter market and the longer term upfronts.  But he said a lot of it can be blamed on networks selling advertising too cheaply in last year’s upfront.

Shaw said he’d rather see a far smaller gap in prices between the two markets. “I’d like to see less of a swing in the pendulum between the upfront market and the scatter,” he told reporters after ABC unveiled a very modest 2008-09 schedule.

This year, however, the networks could face a big pushback if they try to raise prices, given the state of the economy. Shaw, while saying it was too early to predict, nonetheless seemed relatively confident when asked about upfront pricing. “We don’t see a huge change in the short term,” he said of advertising budgets.

One reason is that Shaw believes it has been “proven again and again” that companies would do better to advertise their way through an economic downturn, rather than risk losing brand recognition and customers with marketing cutbacks. “It’s much wiser to maintain share,” he said.

As for timing of deals this year (some buyers are predicting a big slowdown), Shaw said ABC had talked with advertisers but that didn’t necessarily indicate actual deals would be reached more quickly or slowly than normal.

“We’ve had conversations, but that’s not new. If you wanted to go out and write early money, you could.”

(Photo: ABC)

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