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date: 17 October 2019

Abstract and Keywords

Television advertisements in the United States are bought and sold in a highly idiosyncratic market whose structure appears to be unique. Specifically, 70–80 per cent of broadcast network television advertising inventory is sold in a hectic two-week period known as the upfront market, while the remainder is sold during the balance of the year in the so-called scatter market. This article describes how television advertising is bought and sold in these markets, with an emphasis on pricing. It begins by presenting an overview of the American broadcast television industry, followed by a description of the upfront and scatter markets. This is followed by a more detailed description of how prices and products are developed and sold in both the upfront and scatter markets. The article discusses the use of automated pricing and revenue management systems by the networks, and concludes with a short discussion of the changes that the industry is undergoing. The article focuses on the United States, although it mentions practices in a number of other countries.

Keywords: television advertising, price setting, broadcast television industry, automated pricing, revenue management, upfront market, scatter market

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