Wells Fargo analyst John Janedis made calls to various industry executives to determine that cable network advertising is currently being sold for rates 30% higher than those sold during the upfront season last Spring. In addition, initial signs point to Q110 spending showing modest signs of growth over the previous year.
This is good for all advertising, including online, since tighter inventory impacts demand across media. Online video in particular could benefit since sold-out TV inventory could cause advertisers to look for additional inventory or better deals online. Here is an excerpt from the report:
“Based on channel checks, we believe CY4Q09 and early CY1Q10 scatter rates are above our/Street. We think some limited 4Q scatter inventory is being sold at 30%+ vs. the upfront with many networks sold out. 1Q had been a concern for us, but early 1Q rates appear to be up low double digits vs. upfront. We are raising our cable net adv. assumptions for the group, and now expect low singles (avg) advertising growth in C4Q vs. our prior -1% estimate, with mid single digit ad growth in 1Q10.”
Of course, it’s important to note that the upfront was held in mid-2009 when prices were very depressed. However, the higher rates and tightening inventory are further indications that the ad market across many media is coming off of a bottom heading into 2010.
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