Myers: No Ad-Sales Upturn Until Mid-2002

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New York— Myers Reports Inc.'s Executive Retreat here last week incorporated a hit song from the '60s into its theme, "Summer in the City: Beating the Media Doldrums."

But the ad-sales forecasts CEO Jack Myers delivered were so downbeat that a lyric from a '50s hit would have been more apt: "There ain't no cure for the summertime blues."

Myers told the 250 who gathered at Chelsea Piers that the broadcast and cable networks would be singing the blues this summer, as advertisers will take $1.5 billion — or more —out of the overall upfront marketplace. The ad-sales market probably won't see its fortunes reverse until this time next year, he added.

The cable upfront, expected to be most active this week and last, will amass between $4 billion and $4.2 billion, down $600 million to $800 million from last year, he estimated.

Cable sellers are trying to hold out for cost-per-thousand increases of 8 percent to 12 percent — probably in vain, as ad-agency buyers press hard for cuts of 18 percent to 25 percent.

But cable programmers will likely offer clients far fewer option rights than in the past, said Myers. That's because networks are trying to prevent major advertisers from again slashing their year-ago upfront commitments by several hundred million dollars, as they did with 2000 buys.

The broadcast networks' just-concluded upfront plunged more than $800 million to between $6.5 billion and $6.6 billion, Myers calculated. But his take on the TV upfront fell well below other recent industry estimates, which put the tally closer to $6.9 billion.

Nor did Myers have high hopes for subsequent scatter market sales. "It doesn't look that positive for the scatter market," he said.

Most of the other speakers at Myers' daylong retreat hit a more upbeat note in focusing on the various forms of interactive-television advertising. For them, the big unanswered question was when those opportunities would offer meaningful penetration.

Also still to be determined: the extent to which advertising, television commerce or subscriptions will drive ITV revenues, Myers added. Industry experts have projected that ITV advertisers will generate anywhere between $400 million and $4 billion by 2006; Myers leaned toward the low end of that range.

Canal Plus Technologies CEO Jean-Marc Racine expected significant ITV-capable digital set-top box deployment and content in about two years.

TiVo Entertainment Group national director of advertiser sales Ken Ripley restated his company's position that it can move clients from "shotgun" or "intrusion-based mass marketing" to "permission-based relationship marketing."

TiVo, which had 200,000 subscribers as of May, is now developing boxes that can store 100 and 200 hours of programming, up from the current 60-hour limit.

During his segment, Ripley demonstrated some TiVo program-preview features, including one in which NASCAR fans would see logos for Miller Lite. But he seemed reluctant to name other current advertisers until Myers himself cited BMW, Lexus and TiVo's recent deal with The Coca-Cola Co.

"I continue to be bullish on TiVo," said Carat North America CEO David Verklin, speaking from the audience. "The [ITV] revolution has swept Europe already," he noted.

But another ad agency, Bates USA, was less optimistic last week. It reported that its latest online survey of 40,000 consumers indicated that personal video recorders like TiVo "pose a potential threat to TV ads."

Wink Communications Inc. offers advertisers more than 4 million Wink-enhanced households, which CEO Maggie Wilderotter projected would soar to 20 million in two years.

Wink ran 6,000 national advertisers' spots in the 2001 first half, generating 1.3 million interactions and 500,000 "takes." A take signifies a viewer who requests information, enters a contests and so on, she said.

The take rates for coupons, brochures, free samples and contests ranged from 0.5 percent to 1.6 percent of viewers, with contests at the high end.

Wink has done particularly well with both U.S. and foreign automakers, Wilderotter said.

J. Walter Thompson Co. new-media strategist Sara Hall talked about the success of its Wink-enabled ads for Ford Motor Co.'s Explorer sport-utility vehicle. The enhanced version of a spot titled "Geyser" was viewed in 4 percent of Wink homes; 61 percent of those who saw it requested a brochure.

Multiplatform selling has become a major buzzword this year and Gemstar-TV Guide International president of media sales Jeffrey Mahl made note of two success stories.

Mahl — who headed sales at ESPN several years ago, when that network launched its integrated sales efforts — cited Bristol-Myers Squibb Co.'s Excedrin and DaimlerChrysler Corp. Those clients supported their respective sponsorships of the TV Guide
Awards and Golden Globe Awards specials with buys in the company's TV Guide
magazine, Web site, cable channel and interactive program guide, he said.

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