Ads rolling in with visions of holiday sales Seasonal: Media companies and advertising agencies traditionally benefit at this time of year as retailers go all out to attract Christmas shoppers.

December 09, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Call it the Echo Boom.

It's a familiar term to describe what happened when baby boomers started having kids, but it has a second meaning at this time of year. As retailers brace for a selling season that can deliver 60 percent or more of their year's profit, the echo boom is felt at media companies and advertising agencies, who see a smaller but still noticeable spike in the fourth quarter.

"I used to work in an ad agency, and the fourth quarter is basically when we made our money," said Connie Scholz, a spokeswoman for Philadelphia-based Comcast Corp., the main cable TV carrier in Baltimore, Howard and Harford counties. "We [at Comcast] get about 33 percent of our sales in the fourth quarter."

It's a story that finds echoes throughout the media business. Some say the department stores come through big at this time of year. Others, especially those who air a lot of kids' programming, say it's the toy makers. Even car dealers have been known to come through with a year-end sale and ad blitz.

Newspapers get fatter to accommodate the ads, but not always a lot fatter. For example, The Sun last year got 10 percent of its all-edition advertising during the the last five weeks of 1995, which are about 9.6 percent of a year. Television, where the number of ads per hour is finite, just gets more expensive.

For some stations, the Christmas rush is a way to make up for disappointing political advertising this year, which stemmed from the fact that both presidential campaigns conceded Maryland early to Clinton-Gore. For NBC affiliates such as WBAL-TV in Baltimore, it's gravy dolloped onto a year that already included the Olympics, itself an ad bonanza.

"Traditionally, television stations experience one of their largest quarters in the fourth quarter, and the second quarter tends to be very nice too," said Bob Fein, sales director at WBAL-TV. "It's not as much as retailing, though. That's scary."

In a typical year, Fein said, a typical station probably gets 20 percent of its annual revenue in the first and third quarters, with 30 percent coming in each of the second and fourth quarters.

WJZ-TV General Manager Marcellus Alexander made a similar point: His station sees a jump at Christmastime, but also tends to see spikes around smaller holidays such as Mother's Day, the Fourth of July and Labor Day.

"We see smaller jumps during those holidays," said Alexander, whose station is owned by Westinghouse Electric Corp. and affiliated with CBS. "Thanksgiving to Christmas is the strongest."

Fein said TV advertising isn't quite as seasonal a business as it used to be. Changes in the economy, especially telephone deregulation and the shift toward managed health care and much more consolidated hospital companies, have put aggressive new year-round advertisers on the air.

Locally, that means the campaign for the Helix hospital chain and more spending by telephone companies gearing up to enter markets that regulations used to keep them out of. "None of those are dependent on the time of the year," Fein said.

But other advertising customers vary a lot by the time of year, said Steve Marks, general manager of Baltimore's Fox affiliate, WBFF-TV. Channel 45 and WNUV-TV (Channel 54), which like Fox 45 is managed by Sinclair Broadcast Group, both have a lineup heavy on children's programming that generates a flurry of toy advertising at Christmas.

Advertising aimed at children is about 7 percent to 8 percent of the stations' revenue, Marks said. "The fourth quarter usually makes up 75 percent of that 7 to 8 percent," he said.

Marks and Alexander said this Christmas looks good for Baltimore television advertising, which is about a $180 million market. Alexander said WJZ's seasonal sales are likely to be up about 15 percent, led by big growth in spending by retailers.

"The increase at our station is led by Target," which opened more than a dozen stores in metropolitan Baltimore-Washington this year, Alexander said. "Those [past] advertisers who are in are in for a little more, and then there's the Target factor."

A busy Christmas led by clothing companies, department stores and toy companies makes the advertising business sound a lot like retailing itself. But business deals with the rush a lot differently.

Since everyone knows it's coming, most of the actual work gets done in advance, so ad agencies and media outlets don't go on the feverish seasonal hiring binges of their retail peers.

"By the time we get here, everything has been done," said Dave Robinson, media director at W. B. Doner & Co., the advertising firm that is headquartered in both Baltimore and suburban Detroit. "But there will be a retailer or two that has a disappointing Thanksgiving weekend and on Monday says, 'I've got to get on.' "

Not everyone agrees with that, necessarily. Doug Raymond, president of the Retail Advertising and Marketing Association in Chicago, said retailers who fare poorly early in the Christmas season will start cutting prices quickly and deeply. He said this year's selling season, given the late Thanksgiving, gives them little choice.

"Consumers look at 10-15 percent off and say, 'I'll be back in three weeks,' " Raymond said. "My concern is that profit margins may be very poor."

But if Robinson is right, the stragglers will have Bob Fein to deal with. And he has scarce, delicious "Seinfeld" spots. For a price.

"Across the board, you would probably look for a 10 to 15 percent increase in cost," Fein said. "All of our pricing is based on two things -- audience ratings and demand."

Pub Date: 12/09/96

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