/// Forecast: Scatter Sags, but There’s Light at the End of the Tunnel

May 3, 2013  |  Media Week

The scatter market may not be as strong as media conglomerates are reporting, but according to Magna Global, things should begin to pick up speed over the next several months. In a report issued Friday, the media agency said that the TV market was stagnant in the first quarter, as networks sold scatter inventory at “almost no premium over the 2012-13 upfront” rates. This flies in the face of claims made by media CEOs during this week’s Q1 earnings calls . Viacom reported that scatter-over-scatter CPMs are up 20 percent, while CBS said it secured rates that were “up double digits over last year’s upfront pricing.” Magna said that although pricing is up in the second quarter, this is primarily a function of “low supply due to poor ratings, rather than a general surge in demand.” Looking ahead, the agency said it believes national TV advertising will grow modestly, while local TV will be down. Per Magna, overall TV ad revenues in 2013 will decrease by nearly 3 percent versus the year-ago period. Excluding the unfavorable comps to a year in which the Olympics dumped more than $1 billion into the ad economy, the TV marketplace should improve by around 2 percent. The Magna analysis comes as the broadcast networks prepare their 2013-14 upfront presentations. The agency briskly dismissed the notion that the upfront ritual is no longer relevant, noting that the predictability and scale afforded by the spring bazaar protects both buyers and sellers. “Many have called for this dated practice to end, in an age where real-time, data-driven, auction-based, last-minute trading would rule instead,” Magna said. “Not only do the upfront negotiations survive in modern television, but they seem to be winning new converts in digital media too.” Another reason why clients buy upfront is because advance buys are generally more budget-friendly than scatter investments: “Buying on the scatter market has almost always proved more expensive on a CPM basis during the last 10 years.” Media buyers and Wall Street watchers anticipate something of a d

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