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Strong TV ad sales a gamble on US economy
New York, June 14: A record crop of US advertising pledged for the autumn 2003-04 television season shows advertisers are betting heavily on an improved economy, a gamble that could yet unravel, media buyers and analysts said.
New York, June 14: A record crop of US advertising pledged for the autumn 2003-04 television season shows advertisers are betting heavily on an improved economy, a gamble that could yet unravel, media buyers and analysts said.
Industry players said the bumper sales come at the expense of other media, despite rising prices and unstable ratings for television broadcasters. They also warned that upfront commitments to buy ad time could fall through without proven economic strength over the summer.
"You look at the Wall Street economy and you look at advertising spending and it's not adding up," said David Doft, media analyst at CIBC.
Advertisers secure time on the program line-ups during the "upfront" sales in May and June, but have limited scope to pull out. There are no financial penalties, but advertisers are careful protect relationships with networks.
The latest upfront sales are estimated to have closed at a record of over $9 billion for the networks and nearly $6 billion for cable channels, analysts said.
The figures indicate an increase of more than 15 per cent for the networks and over 20 per cent for cable channels, far outpacing earlier industry forecasts. But that contrast starkly with forecasts that overall advertising spending will grow a modest three per cent this year, dampened by economic woes and the Iraq war. A stronger recovery is expected in 2004, in part due to US presidential elections and the Olympic games.
Bureau Report
"You look at the Wall Street economy and you look at advertising spending and it's not adding up," said David Doft, media analyst at CIBC.
Advertisers secure time on the program line-ups during the "upfront" sales in May and June, but have limited scope to pull out. There are no financial penalties, but advertisers are careful protect relationships with networks.
The latest upfront sales are estimated to have closed at a record of over $9 billion for the networks and nearly $6 billion for cable channels, analysts said.
The figures indicate an increase of more than 15 per cent for the networks and over 20 per cent for cable channels, far outpacing earlier industry forecasts. But that contrast starkly with forecasts that overall advertising spending will grow a modest three per cent this year, dampened by economic woes and the Iraq war. A stronger recovery is expected in 2004, in part due to US presidential elections and the Olympic games.
Bureau Report