Following a strong upfront market in
which cable captured as many ad dollars as the major broadcast
networks, one senior sales
executive thinks cable can do
even better next year.
“I really believe that next
year’s upfront marketplace for
cable will exceed $10 billion,”
David Cassaro, NBCUniversal’s
president of cable ad sales,
said last week.
The upfront marketplace is
nearly wrapped up. Broadcast
networks took in about $9.1
billion in advertising commitments
for next year’s primetime
shows, with prices on a
cost-per-thousand viewers basis
up from 9% to 15%.
Volume on the cable networks
has been estimated to be
about $9.4 billion, catching up
to broadcast and passing it for
the first time. Some sellers reported
volume up as much as
25%. Prices vary from network
to network, depending on their
ratings strength and volume of original programming, but increases
ranged from about 8% to the mid-to-high teens.
While some analysts have noted that networks sold additional
during the upfront to lock
in pricing and revenue before
the economy gets worse, Cassaro
thinks the market will remain
strong, despite short-term
concerns about consumer confidence,
gas prices, unemployment
and the effects of
earthquakes and tsunami in Japan.
“We believe, as many do,
that corporate profits are a
leading and important indicator,
probably the most important
indicator, of future ad
spend,” he said. “So we think
we’re going to see strength in
the television marketplace.
We’re going to see strength in
scatter on top of this upfront,
and I think that we’ll even
move very positively into next
year’s upfront as the economy
slowly continues to recover.”
Advertisers are turning to cable because it offers better
value than other television options and because they
are investing in the kind of original programming sponsors
Cassaro noted that marketing and advertising budgets
are easy to cut when profi ts are under pressure. “But
when profi ts are up and you’re looking to expand your
business, you’re going to spend more money in advertising,”
he said. “And guess what the first stop in advertising
and marketing is? Right. Television. And guess what
the best value in television is? National cable.”
Last week, Scripps Networks Interactive said it was
nearly done with its upfront, and took in advertising commitments
worth nearly $1 billion. “With strength from
general market advertisers and our networks’ endemics,
this has been the best upfront in our company’s history,”
Steve Gigliotti, president, national ad sales and marketing
at Scripps Networks Interactive, told Multichannel News.
NBCU Cable also had a record-setting year.
“Demand from advertisers supported some of the
highest year-on-year price increases in the market,” Cassaro
Buyers said NBCU’s USA Network was getting percentage
price increases in the mid-to-high teens. The big volume
was also benefitting NBCU’s smaller channels.
Cassaro added that more marketers were also buying
digital components to complement their television packages.
“By adding digital and all the extensions, including
social, what you’re doing is turbo-charging your television
advertising with these other media extensions,” he said.
Jon Lafayette is business editor of Broadcasting & Cable.