Seven wins lion's share of a shrinking pot

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This was published 15 years ago

Seven wins lion's share of a shrinking pot

By Miriam Steffens

KERRY STOKES'S Seven Network has scored an emphatic win in television advertising sales, garnering a 40 per cent share of the metropolitan TV ad market last year for the first time since Kerry Packer's dominant Nine Network of the 1990s.

But the victory came with a warning sign for all commercial networks, with a dramatic slump in the total size of the ad pool.

Figures released yesterday showed the amount spent on TV advertising in capital cities shrank 5.3 per cent in the second half, an unprecedented decline in a year that should have been boosted by the Beijing Olympics.

Without the 17-day event, demand would have slumped by as much as 8 per cent.

"The market coming down quite that much was a surprise to us all," one TV executive said last night.

The Games broadcaster Seven was the only network to increase its revenues, with $1.15 billion in ads last year, slightly up from the $1.14 billion it booked in 2007. While its chief executive, David Leckie, had flagged in August that the broadcaster would be "very much insulated" from the downturn because of the Olympics, the data shows how thin its sales buffer had become as the economy slowed.

The Channel Nine stations, owned by PBL Media and Bruce Gordon's WIN Corp, saw their revenues fall 4 per cent to $892 million for the year, despite staging a ratings comeback under Nine's returned chief executive, David Gyngell.

Network Ten, which lost viewers with the demise of Big Brother, posted a 6.8 per cent fall in ad sales to $808 million.

There is no sight of relief yet. "The first quarter will be a tough quarter," Seven's chief sales and digital officer, James Warburton, said.

It is a stark contrast to a year ago, when the TV market jumped more than 9 per cent in the December half with the economy still charging ahead and heavy spending on the federal election campaign.

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A year on, the downturn in the global economy has prompted advertisers such as car makers and finance companies to slash their marketing budgets.

Clients are booking only weeks ahead, putting pressure on the ad rates networks can charge.

"It's definitely a buyers' market out there," one TV executive said. Some were predicting spending in the first quarter could be down by 10 per cent.

Regional broadcasters fared better. Their advertising sales were slightly up at $862 million, though they fell 1.3 per cent in the second half.

The slump "certainly puts out a warning shot and adds weight to some of the more negative comments by financial analysts", said Fusion Strategy's managing director, Steve Allen.

Mr Allen had forecast a 3 per cent decline for the TV ad market this year, but "we're definitely going to be revising our forecasts further down. We expect the market to get worse."

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