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Spot TV Spending Soars

Boosted by a strong advertising economy and hefty primary spending in February and March, the spot television marketplace posted a 16.2 percent gain during the first quarter, the Television Bureau of Advertising reported last week.

According to the trade group's analysis of CMR estimates from the top 75 markets, national spot was up 19 percent over last year, to $2.8 billion, and local spot was up 10 percent, to $1.16 billion.

Wall Street analysts, who monitor sales-rep reports covering all television markets, put national spot growth at an estimated 13 percent for first quarter.

"This year will be bullish," said Maribeth Papuga, senior vp/director of local broadcast for MediaVest, who noted that the significant gains are coming off a low base from a weak first quarter last year.

Though broadcast analysts and TVB research executives are reticent to waver from last year's total-year forecasts for 2000, which hovered around an average of 8 to10 percent growth for national and 7 to 9 percent for local, robust pacing is expected to continue. "There is no let-up for national spot for the remainder of the year," said PaineWebber broadcast analyst Lee Westerfield, noting that campaign fund-raising continues to dump millions into the candidates' coffers. "Bush has already spent about $15 million, and it looks like he has $45 million in his troves again."

Excluding political, the automotive and telecom categories stepped up spending during first quarter, and the output of retail ad dollars increased almost 60 percent over last year.

Papuga noted that the excessive spending from the financial and dot-com sectors during fourth quarter 1999 in the top 10 markets spilled into first quarter, likely boosting the average for national and local spot. Moreover, she added, as ratings continue to erode, media buyers are purchasing more inventory to maintain set cost-per-points, putting an extra squeeze on avails.

Taking all factors into consideration, station sales executives are likely to capitalize on politics, Olympics and big advertising budgets and hike spot rates a little higher. They might as well because next year "they'll be crying," said Papuga.


Megan Larson, ADWEEK Online. June 5, 2000

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