Local appears likely to rise 5%-7%, while national, at plus 2%-3%, falls short of anticipated 5% increase. Fast food, retail and auto spending off; telecom still flying high.
With the books closing on the second quarter, TV stations appear headed for a 4% gain in spot TV sales for the period, with national business up 2%-3% and local sales up 5%-7%, according to a TVNewsCheck survey of TV reps and major station groups.
Political spending continues to buoy a tepid market for core spot TV categories with reps and station groups reporting that, if political spending were taken out, national would be flat or down slightly and local would finish in the low single digits. Telecommunications was the quarter’s big spender, while automotive, fast food and retail all showed disappointing growth.
“Retail is struggling and I don’t know why,” says the chief ad sales executive at one of the big three network station groups, speaking on background. “As for fast food, it’s a surprise that it’s as low as it is.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â He suggests many fast food brands dump large amounts of money in certain quarters only to hold back in others. This has been the case this year with Yum! Brands.
National spot’s 2%-3% gain is lower than the 5% increase most reps expected early in the quarter. They pin much of the blame on domestic auto manufacturers, whose spending is down compared with a year ago and on a slower than expected political marketplace. “Auto ended up almost flat,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â says Val Napolitano, president of Petry Television, who says healthy increases from foreign car manufacturers were encouraging, but didn’t make up for the shortfalls on the domestic side.
Chris Jordan, senior vice president and COO of Katz Television Group’s Continental TV, which represents 150 medium- and small-market stations, says “retail has only been decent and fast food just OK. Telcos were like a lifesaver.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
Political spending has grown less quickly than in 2004, in part because some primary races turned out to be less competitive than anticipated, Napolitano says.
Others note that there’s less issue money around this year. Larry Sabato, director of the University of Virginia’s Center for Politics, isn’t surprised that issue spending is down from two years ago. “Issue spending is always more intense in a presidential election year,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â he explains, adding that this year parties and other groups are husbanding their resources for the general election when control of the House and the Senate will be up for grabs.
“People in politics understand that issue ads can be helpful in certain ways at certain times, and this isn’t one of them,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â Sabato says. “This is a time for intense focus on the 35 House and eight Senate races that can change the composition of Congress.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
This means that most of the year’s political spending will occur closer to election time, Sabato says. “I’ve looked at the totals for every party committee and they’re setting new records,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â he says. “There’s more money, but it will pour into these key races.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
In some areas, spending has begun early. Sources at the CBS station group report spending is “hugeÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â in Los Angeles, Pennsylvania, Florida, Denver, Minneapolis and Detroit.
As for traditional advertisers, there’s nervousness in the air, and a continuation of a long-term trend of moving money out of spot TV and into network.
“People seem to be afraid to spend all their money,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â says a media buying executive with clients in retail and fast food. “Clients seem to be holding back, waiting to see what’s going to happen with the economy.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
More troublesome for her, she says, is the slow shifting of spot dollars to national buys. “The amounts are not huge,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â she explains. “We’re talking small amounts of money, but it’s just enough to hurt.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
Howard Nass, long-time spot buyer for several agencies and now partner in his own planning and buying company, Nass-Hitzig, insists it’s time for local television sales execs to look elsewhere.
“Local is too dependent on cars and fast food,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â Nass begins. “Stations are immediately in trouble if one or both go soft. Plus, you’ve got local cable breathing down your neck as well.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
He offers “three golden opportunities:ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â oil, insurance and pharmaceuticals.
“TV stations overlook the local gas station,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â he explains, “but with all the bad news about gas prices, now’s the time to get these guys at the local Mobil or whatever to do some positive advertising, some ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¹Ã…â€œWe’re doing good things’ type spots.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â Ditto with local insurance companies and with pharmecueticals, he says.
“These guys spend 90 percent of their ad dollar nationally, it’s true,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â Nass says, “but that leaves 10 percent that’s up for grabs. Mr. Local Sales Manager has got to start mining new areas of spending. They’ve got to start digging somewhere else.ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â
Kathy Haley contributed to this story