Advance Sales for Broadcast TV Ad Time to Hit $7 Billion

Advance sales of advertising time for broadcast television’s 1999-2000 season will top $7 billion, providing a double-digit increase over the most recent season and handily beating most observers’ predictions.

The annual process of selling prime-time advertising time for the coming fall season, known as upfront sales, also is moving more rapidly than usual--driven, observers say, by the booming national economy and strong interest from a wide range of advertisers that need to reach huge groups of consumers. “I’ve been following upfront sales since 1983, and this is by far the quickest upfront,” said Joe Mandese, editor of Myers Report, a New York-based trade publication. “Usually the industry tries to get this wrapped up before July 4.”

The estimated $7 billion in upfront sales, a 13% increase over the 1998-99 season, includes deals that the Big Four networks already have completed, as well as deals made by smaller broadcasters. As remaining deals are concluded during coming weeks, observers said, the total is likely to rise higher.

News Corp.’s Fox network leads the four large networks with an 18% increase in upfront sales compared with the 1998-99 season, Mandese said. CBS is in second place with a 17% rise, and ABC has boosted its upfront revenue by 10%. NBC has used its Olympic Games coverage to help generate a 5% rise.

Time Warner’s smaller WB network is in line to reap a 50% increase, Mandese said, while upfront sales at Viacom’s troubled UPN network are flat.

Most observers had expected broadcast upfront sales at the Big Four networks, stuck at about $6 billion for the last two network seasons, to register a healthy gain. So far this season, observers say, ABC, CBS, Fox and NBC have registered a cumulative $6.6 billion in revenue.

Hearing that upfront sales have topped $7 billion, some observers said it showed that despite a years-long ratings slide and strong showings by cable networks, networks continue to play an important role in advertising.

“Despite the continued ratings erosion, broadcast is still able to charge more to reach what is an increasingly fragmented audience,” said Bob Flood, senior vice president of DeWitt Media Inc., a New York-based independent media-buying agency.

“It’s very good news for all of us who are concerned about the continued viability of broadcasting,” said Jon Nesvig, president of sales for Fox Broadcasting Co. in New York. “The demand for network television continues to be very strong.”

Observers say the rush to buy prime-time network advertising space was prompted in part by painful memories from last year when advertisers who initially stayed on the sidelines ended up paying inflated prices for what’s called “scatter” advertising--commercial time purchased during the season. “The very strong scatter market this year caused advertisers to look more favorably on spending upfront,” Nesvig said.

Rather than waiting to see how the market would shape up, such industries as automobiles and Hollywood “were quick to get in,” Mandese said. “They saw the market move and didn’t blink when it came to paying big [cost per thousand rates]. They knew it was only going to get tighter as time went by.”

“I can’t think of a category where there were problems,” Nesvig said. “Autos were strong, as were telecommunications . . . and, while the ‘dot.coms’ got all the media hype, the retail guys aren’t about to roll over. Store chains were stronger than anyone’s seen in years.”

DeWitt Media’s Flood suggested that strong demand for network advertising could continue in such sectors as telecommunications, which are being reshaped by new technology and mergers. “As the mergers occur, companies such as AT&T; are going to get their houses in order and get to the point where they need to get their messages out.”