A headline in a recent Broadcasting and Cable newsletter suggested that the cable upfront appears to be ready to surpass the broadcast market’s recent $9 billion plus take from advertisers. Estimates for the cable upfront seem to be focusing in at around $9.4 billion.

While this would be a first, should this really be a surprise? 

Broadcast’s gains have to be measured amid the fact that it has benefitted from a surprising spike in spot demand given its ongoing ratings declines. The gains in CPM are a combination of higher unit rates and the impact of continued ratings erosion as each spot delivers less audience on average than it once did. So, in theory, even rates that are flat in a program would carry a higher CPM than it did one year ago if that program has a lower audience level. As the years go by, it takes an increasing amount of commercial inventory to reach target demo delivery goals than it did a few years prior. While it might have taken 20 spots to reach 100 demo points five years ago, it now takes maybe 25 or 30 to reach that same targeted delivery. While there were impressive CPM gains ranging from roughly 9 percent to 15 percent depending on the network’s place in the hierarchy, this year’s upfront totals will not equal the broadcast industry’s highpoint in 2004 thanks, in part, to that continued decline in delivery assuming a constant in the percentage of sold inventory. 

Given the demand present and despite the constant harangue of digital sellers with dollar envy, a number of advertisers have made it clear that television remains the primary focus of the marketing budget. But if the points aren’t there in broadcast, where do you turn? 

The growing appeal of cable networks have been both a cause and beneficiary of the ratings decline of broadcasters in terms of viewers and ad dollars. Cable’s timing has been impeccable as this increased demand for its ad inventory comes when the industry is putting forth better and more highly rated content than ever, including more first run, local news and sports programming, across a wider array of its networks. Upfront reports confirm that the continued decline in broadcast audiences is translating into ad buyers buying much more deeply into the cable network universe this year in order to meet the television campaign goals of their clients. It also appears that the gap between broadcast and cable pricing continues to narrow. These are the fruits of the continued fragmentation of the television world. Buys that might have been five or six networks deep in years past are now going past 10 or 12. The gains are moving beyond the first tier networks of ESPN, TNT, USA, TBS, Discovery, etc.

What does this mean for local markets? It’s hard to imagine that what we’re seeing play out in the upfront won’t also happen there. Local advertising buyers will also likely find themselves buying more spots on broadcast stations and more local avails on a deeper selection of cable networks from the MSO’s than ever before just like their national brethren. We can all debate the impact of cord cutting or cord shaving in this Netflix-influenced era, but one thing is pretty clear-cut: It doesn’t much matter whether you’re cable or broadcast these days, just as long as the word “television” follows. 

The real trick for both broadcast and cable TV sellers is figuring out how to grow the ad pie in their local markets instead of poaching each other’s clients and prospects. The strength of their traditional assets, including their brands and television inventory, plus their growing digital offerings give them great allies in that effort. 

I guess it’s not a bad time to be selling TV advertising, is it?