PGR’s experts in traditional media ad buying saw strong 1Q result. Experts estimate an aggregate 5-10% growth in 1Q ad budgets and expect additional acceleration into 2Q. An increase in political advertising has fueled the acceleration of TV advertising and outdoor advertisers are hopeful that a new rating currency will boost their sales, but radio advertising continues to suffer from dwindling spending.

TV Recovery in Full Steam: Experts report tighter TV inventory and fewer cancellations and CPM increases in 1Q in both broadcast and cable TV advertising. Since auto advertisers roared back into the market late last year, ad buyers have reported broadcast and cable TV networks are demanding higher prices and offering less flexibility. Experts note scatter pricing is up between 8-40% over the upfront, depending on the network.  Experts look for higher upfront and scatter market prices this Fall. Fierce political elections also bode well for political spending, which is already adding inventory constraints to the networks. Among specific networks, experts see strength in broadcast networks CBS, ABC (DIS) and Fox (NWS) and cable networks TNT (TWX), USA (CMCSA) and Discovery (DISCA). Given the TV ad market’s notable weakness in 2009, expert reports point to strong year-over-year revenue growth in TV in 1Q and 2010, especially in broadcast given easier comparisons. National CineMedia (NCMI) may be best positioned to capture the tight TV scatter market given it sells less inventory on a forward basis than TV networks and some of its forward-sold inventory of automatic CPM inflators cushioning the company from last year’s market woes.

Political Advertising Heating Up: Ad buyers report political dollars flowing into advertising, starting to put pressure on inventory and support prices. Most experts see this situation intensifying with the approach of fall elections and following the Supreme Court decision to lift corporate spending limits on political campaigns. This is likely to benefit local broadcast TV in particular (CBS, DIS, GCI).

Outdoor Improving Slowly but Lagging: The tone from billboard advertisers was less enthusiastic than that of TV or Internet ad buyers, with some Outdoor experts reporting an improvement in the market while others noted ongoing weakness. Outdoor is likely to be a later cycle recovery than other media. Expert reports on the new EYES ON rating system rolling out this year suggest outdoor could address broader ad budgets and see new growth in 2011 and beyond. That said, the new rating system is unlikely to be fully rolled out until the end of 2010 at earliest and may be susceptible to delays in full implementation. (See the Network View on EYES ON for further color).

Radio Continues to Languish: Experts report that radio spending has continued to drop. The lower PPM ratings have led radio companies to increase their spot loads and require ad buyers to purchase more inventory to hit the same campaign goals. As a result, buyers seem less inclined to spend in radio.

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