Sep 11
30
Upfront Advertising Costs in High Demand for the Fall
Television advertising spending is expected to increase for the second year in a row, bouncing back from a bleak 2009 ad buying season.
In 2011, the costs of upfront advertising are expected to be higher in response to higher demand. Upfront advertising is purchased before the fall television season begins.
However, one of the biggest factors in ad spend and ad availability is still up in the air: The National Football League may cancel several of the games planned for Fall 2011 – and NFL games are frequently among the best times to advertise and fetch the highest ad spend dollars. In addition, media investors will be paying close attention to earnings reported by media companies like Viacom, Discovery Communications, CBS, Comcast and Time Warner, which will be released over the course of the next few months.
This year’s projected ad spend is part of a two year trend. After a difficult year in 2009, earnings for the top four media companies were up 15% to $7.37 billion in 2010. Cable networks saw a 19% increase in the same period of time with earnings coming in at $8 billion. The higher the earnings for television companies, the more likely marketers will spend their future advertising dollars there.
Despite competition from online marketing, television has reigned supreme among ad-supported media. Publicis Groupe SA’s ZenithOptimedia predicts that television ad spending will grow by 5% during this year, compared to an overall growth of 2.5% for overall U.S. advertising spending.
