Advertisers Ready to Buy TV Space

Activity in the upfront market can indicate where TV advertising is heading for the year. In the past few years, advertisers cut significantly when they were buying inventory in advance. During the recession, the upfront market was so dismal that some experts thought the entire business model of TV advertising would be changed forever. What a difference a year makes.  First quarter reports by  major TV media firms indicate that 2011 will be one of the strongest growth years for TV advertising in recent history.

Traditionally, in May, broadcast networks reveal their programming plans for the fall. And this year, ad placements on networks could generate between $8.5 to $9 billion.  The strong level of interest this year could result in a growth rate exceeding 10%. These are the kinds of increases that have lately been discussed in the context of new media platforms, especially online. Industry experts like Kris Magel, Director of National Broadcast for Initiative, Interpublic Group, believes that "[a]dvertisers are realizing that digital and TV work together better than they did separately."

The fears about social media and its effects on TV viewing may have been overblown. TV still commands the attention of a sizeable audience. The media format is not without its threats, though. A recent Reuters report by Paul Thomasch points out that competition from online video could be a game changer.

For now, Thomasch predicts a healthy upfront buying season in 2011. Many advertisers who waited to buy ad space at the last minute during this past year encountered much higher pricing than they would have faced if they’d purchased upfront.  Look for marketers to buy more advertising in advance this year, improving the bottom line for operators like CBS Corp, Comcast and Time Warner.

[Source: Thomasch, Paul. Red-​hot US ad market. Reuters​.com. 2 May 2011. Web. 9 May 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.