Scatter Market Stronger? Look Closer - Maybe At Your Shoes

A media critique by Wayne Friedman Wednesday, Sept. 9, 2015   In the TV industry, you should always wait for another shoe to drop -- maybe even more advertising scatter market footwear.   Now, on the verge of a new TV season, reports suggest fourth-quarter scatter pricing seems to be up slightly over a year ago, with mid-single-digit- to high-single-digit-percentage price increases over the upfront TV ad selling season that was just completed. That would be somewhat of a change from the scatter markets of the past two years or so, which have been generally weak, with  essentially flat pricing. The first shoe was this past upfront TV advertising selling season, which witnessed lower revenue and weak, mid-single digit percentage increases in the cost per thousand viewers. In past TV seasons, all this would suggest a strong fourth quarter scatter market. But not recently. Instead, now TV buying executives seemingly believe the national TV marketplace is entering a new phase: a more-or-less weak/flat phase. At the same time, we know TV networks are still dealing with some makegood inventory from a year ago -- especially in current third quarter period, which is spilling, in part, to the fourth quarter. All that can lift scatter pricing. So what’s what? At the end of the day, the bottom line is, TV networks need to create more viewing impressions, and higher ratings. Until then, CPMs will climb slowly, but overall advertising dollars will drop. Sure, you might be paying $500,000 for a unit of “Empire,” or premiums for late-night network TV talk show inventory. But all this is limited . Scatter TV dollar volume could be climbing -- versus historical levels. But for many, this is just shifting of some upfront dollars closer to airtime -- and not always enough to make up for lower volume commitments made during the upfront. Here’s an example: In July, national broadcast TV grew 54% in terms of scatter revenue place versus July 2014 -- but was 13% down from upfront dollars during the month. This, according to Standard Media Index, which culls data from bookings of 80% of total national U.S. media agencies. Sounds good, right?  Not when you look at the total picture: Broadcast revenue was down 2% for the month. Not only should the TV ad business wait for another shoe to drop but perhaps it should wait for more subtle signs, like a furry slipper or two.