TV ad hikes? They're not buying it

Agencies say they'll wait if networks insist on increases

NEW YORK -- Despite the troubled economy, most advertisers are not slashing their national TV ad budgets for next season, a signal that might bode well for the broadcast networks -- if they don't take hard-line positions regarding rate increases.

Although many analysts project that this year's primetime broadcast network upfront revenue haul could decline by 20% or more compared with last year, most media buyers said the slippage might fall in the 5%-8% range. Even if the money is not allocated in the upfront, they added, it will get spent in the scatter market. Last year's upfront take floated around $9 billion, and most buyers said this year's total will fall between $8.2 million-$8.5 billion.

"Advertisers and agencies are lying if they say they don't have a lot of money to spend in this year's upfront," said one media buyer, who, like most, did not want to speak for attribution. "Ad budgets for TV will be close to last year. We just won't spend it all in the upfront unless we get the right pricing."

Right now, ABC, CBS and Fox are seeking price hikes similar to last year's levels -- 7%-10%. Buyers flatly refuse to consider hikes, and said they will do business at flat-to-negative CPMs compared with last year.

"If the networks refuse to budge, we'll just hold the ad dollars and spend them in scatter," another buyer said. "The networks have to understand there are no must-buy shows anymore and that by waiting for the scatter market, no advertiser is going to get shut out of a show."

The same buyer said that even Fox's ratings juggernaut "American Idol" is no longer a mandatory upfront buy.

" 'Idol' is very high priced, so it's not for every advertiser," the buyer said. "Even if an advertiser comes in during the season and 'Idol' is sold out -- if enough money is on the table, you can bet that Fox will add an hour or two to the schedule. They have that flexibility."

Ironically, broadcasters face a steep uphill battle on pricing in a year when buyers give them high marks for offering possibly their best programming development season in decades. Larry Novenstern, executive vp and director of electronic media at Optimedia, said: "Anyone who thinks the golden age of television was in the 1950s is wrong. The writing, acting and creativity is at its best right now."

He wasn't alone in his praise. While most buyers did not want to speak for attribution about particular shows, they generally liked what they saw. "I can honestly tell you that I can't recall a show whose clips I saw this week that stood out as something I thought couldn't work," said another buyer.

Buyers were particularly pleased with shows from NBC and the CW, the two lowest-rated networks.

ABC received high marks from buyers for offering eight new scripted shows on its fall schedule -- the most of any network. It plans to roll out an 8-10 p.m. block of comedies, which buyers generally cited as bold but risky should they not perform well. ABC ad sales president Mike Shaw touted the network's upscale audience.

Buyers also praised Fox for moving its successful summer reality show "So You Think You Can Dance" to an additional, twice-a-week fall cycle, citing its ability to draw family viewing in a safe environment.

CBS, which has the steadiest schedule entering the fall, got mixed reviews from buyers. On the negative, some shows look a little generic ("Accidentally on Purpose"), but on the positive, the fall lineup has strong flow.

While all indications are that this year's upfront will drag well into the summer, reminiscent of a few years ago, some buyers said that's not a given. "All it takes is one major agency to do one deal that everyone else looks at as defining the market, and things will move quickly," one buyer said.