Q2 option taking/pullbacks prevalent


A major media agency CEO confirms what the market is starting to hear—advertisers are pulling back on upfront commitments and Q2 option taking is bigger than many had thought. Cuts are being made across the board—network, broadcast, cable, you name it.

Said the CEO: “Can anyone be surprised? The market was in for a correction and here it is. It will be the first favorable scatter market in almost a decade. The media market is changing before our eyes.”

Indeed, the dynamic is changing, just like radio. Advertisers, knowing inventory will be available, are focusing more and more on scatter—this has been going on in radio for years.

As well, advertisers in this climate are unlikely to commit as much in the next upfront. With clients reportedly taking double digit options and some taking their right to have up to 50% of their ad budgets, we are looking at some mighty interesting times for the rest of the year. Sales execs will be quite busy filling the newly-available inventory. Pricing will likely be dropping for some networks and programming more than 10%.

RBR/TVBR observation: It may not be all that bad. This looks like a bit of a strategy. Certainly, major advertisers are gambling that they can drop out of some of the upfront deals at the rates they bought last Spring and get back in at lower rates for scatter. Sure, it has been done for years, but this year will be much more because the gamble is much safer.