The New York Times-20080125-So Far- Marketers Have Stuck With Networks
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So Far, Marketers Have Stuck With Networks
NEXT week will bring the beginning of a February sweeps season like no other.
Nearly three months into a strike by Hollywood screenwriters that has suffocated network television schedules, a large portion of prime time is now made up of reality competitions and untested new scripted shows. Questions still swirl about the status of the Academy Awards, which is usually the second most popular television event of the year (behind the Super Bowl).
But so far, advertisers have remained sanguine. Most have opted not to cancel their upfront advertisement commitments for the second quarter of 2008, and some are even making new outlays. The main reasons seem to be that ratings for prime-time shows have not dipped in a meaningful way and that advertisers do not see any more attractive alternatives.
Media buyers and network executives appear to agree on two points: the strike is unfortunate, but broadcast television is still a smart investment.
With the writers' strike, you would have thought people would have taken their options to cancel ad commitments, said Michael Parent, vice president for national broadcast at the agency TargetCast TCM. But because the marketplace is so tight and inflation is so high, no one really took their options this year.
Depending on how the networks perform during sweeps month and whether the writers' strike drags on, advertisers' patience could wear thin. The networks routinely roll out new programming in February because the month is used to set advertising rates for some local television affiliates, but this year they have largely run out of new episodes of their most popular series.
Instead of sure-fire hits in the critical ratings weeks, the networks will be testing projects like Quarterlife, an online series that was picked up by NBC, in addition to game shows like The Moment of Truth, Fox's new lie detector game.
The networks do have plenty of midseason programming ready to go, but reality shows are more prevalent than scripted series like the new NBC drama Lipstick Jungle. Advertisers who rely on high-profile, demographic-specific shows like Grey's Anatomy and Desperate Housewives will most immediately feel the pinch of the strike, media buyers say, as those shows and others have reverted to lower-rated repeats.
Little by little, as we get into February and March, we're going to start seeing some significant changes if the strike continues, said Steve Lanzano, the chief operating officer of MPG, the media buying division of the conglomerate Havas Media. For the moment, he said, clients are still cautiously optimistic.
Media buyers say the impact of the strike has been reduced by its timing. The television and advertising industries anticipate below-average ratings in December and January because holiday programming and repeats usually weigh down the two months.
To be sure, the broadcast networks, with the exception of Fox, have all shed viewers compared with the previous season. But the declines, media buyers say, are more a function of lackluster new shows and the proliferation of digital video recorders, which enable consumers to skip commercials. Until mid-January, the networks still had stockpiles of original episodes of the most popular comedies and dramas.
In a column on Wednesday, Wayne Friedman, the West Coast editor of MediaPost, noted that broadcast television continues to deliver a significant audience.
Where can advertisers turn? Mr. Friedman wrote. Not to the Internet right now; it's not ready. Some money may go to cable, as well as syndication, or even local TV. But the bulk of TV advertising points will still remain on network TV.
If the writers' strike is not resolved soon, it could also cast a shadow on the Academy Awards as it did on the Golden Globes. A telecast of the Golden Globes awards show on Jan. 13 was replaced by a news conference after the writers guild threatened to picket.
The changes forced some blue-chip advertisers to revise their plans. If something similar happened to the Oscars on ABC on Feb. 24, the impact would be larger. Last year, the Oscars attracted major sponsors like AT&T, Coca-Cola and MasterCard at a cost of about $1.7 million for a 30-second commercial.
This year, General Motors plans to promote its GMC, Cadillac and Saturn brands during the broadcast. Ryndee S. Carney, a spokeswoman for G.M., said the company was following a business as usual approach for the awards show but monitoring the situation closely.
We're boxed in, said Jason Kanefsky, a senior vice president and account director at MPG, the media buyer. He noted that the company could shift spending from broadcast to a cable schedule, but most large advertisers are already in enough cable.
Broadcast has a very specific value in the advertising mix.
Advertisers are seeking a certain amount of gross ratings points, which correlate to audience numbers. So if ratings decline, they need to purchase more commercial time to reach the same number of people. The phenomenon has brought about a remarkably strong market for the commercial time that was not sold in advance during last year's upfront period.
It's a function of the fact that there is a scarcity of ratings points in the marketplace. As a result, that's putting upward pressure on pricing, said Rino Scanzoni, the chief investment officer of Group M, a unit of the advertising giant WPP Group. In other words, as television viewership decreases, the price of advertising increases.
Sweeps month has begun to look like an anachronism because Nielsen Media Research delivers overnight ratings to some local stations year-round.
The writers' strike may hasten the shift from a September-to-May TV season, media executives say. In the past week, CBS, Fox and CW have announced cuts to their development slates on concerns about the time frame for the fall pilot season.
Mr. Scanzoni said he expected that the strike would cause production cycles and show schedules to become more staggered throughout the year. At this point in time, if there wasn't a strike, the networks would probably have their hands on lots of scripts for the fall season, he said. Because of the strike, they don't have that.
[Illustration]PHOTO: The stars of Lipstick Jungle on NBC -- Kim Raver, left; Brooke Shields, center; and Lindsay Price -- at the upfronts in May with Marc Graboff, then West Coast president of NBC Universal. (PHOTOGRAPH BY CHRIS HASTON/NBC)