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| Sports TV | |
TV is feeling pinched Major categories are cutting their ad spending Nov 14, 2008 For the longest time, sports TV was recession-proof, or so it seemed, holding up during harsh times as advertisers pulled back from other media. “The sports marketplace has become accustomed to charging premiums that this unforgiving economy will not tolerate,” says Scott Becher, president of marketing firm Sports & Sponsorships. “The media properties are going to have to work harder to demonstrate value to buyers. I’d expect rates to come down.” Ad spending on sports television through August this year was actually up by nearly 9 percent over the same time period in 2007, to $4.9 billion, according to TNS Media Intelligence. But in the time since the entire ad economy has come to suffer far more deeply with the worsening U.S. economy. A huge problem for sports TV is that three of its biggest ad categories are having rough years and have chopped ad spending as a result. Auto sales fell 14.6 percent through October from a year earlier, beer has continued its long slide, and the financial services industry has imploded. But also cutting back are a lot of other ad categories intent on waiting out the slowdown in consumer spending. That left the sports scatter market, where ad time not sold in the upfront market is auctioned off through the year, in much the same shape as the scatter market for entertainment programming. Still, the sports TV ad market isn’t in dire shape, at least not yet. He says the scatter marketplace is slow but notes, because his network wrote more business in the upfront than last year, that ad spending is slightly up from a year ago. And upfront advertisers aren't canceling those buys any more than in past years. But sports TV is also being boosted by ad spending increases in other categories, notably fast-food restaurants, many of which are seeing revenue soar as consumers shop around for low prices. And others like movies and car insurance are spending about what they did last year. Sports TV is also seeing a few new ad categories come in, including men’s grooming products, which are helping to offset some of the budget cuts by major ad categories. “There’s no question that the strength of the sports marketplace, like every other part of the media industry, has been seeing weakness,” says Ed Erhardt, president of ESPN customer marketing and sales. “But we continue to write business and we are seeing new categories emerge.” And ratings for most sports are not tumbling as they are for the broadcast networks’ regular shows. That makes sports comparatively attractive to advertisers, says Sports Business Group principal David Carter. “Generally speaking, advertising in sports right now makes a lot of sense,” he says. “They’re a captive audience and the major sporting events still hold their appeal.”
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