You can expect the buy side of the advertising business–the ad firms and their clients–to predict sales will be down in TV’s upfront sales market. That’s their job — just as every broadcaster talks up the high demand for 30 second spots before the selling season, which kicks off today.
More worrisome is when, on the eve of the upfront, big advertisers start saying they’re cutting their overall ad budgets.
That’s what sources close to the world’s largest advertiser–Proctor & Gamble (PG)–are telling the WSJ. P&G, which spent $3.5 billion on advertising in the U.S. last year, is cutting its overall ad budget 10%. That’s not a good sign for the broadcast TV networks as they show off their fall TV schedules this week and prep to sell as much as 80% of their ad inventory for next year. What’s more, big P&G brands like Crest and Tide have been moving dollars “aggressively” to the Web.
The industry’s most influencial analyst, Jessica Reif Cohen, has already predicted broadcast TV’s upfront dollars will be down anywhere from 2% to 14%. The big question for the Internet economy: Will the ad dollars that don’t go to TV move to the Web on a 1-1 basis?