CW Wraps Upfront Sales, Secures CPM Hikes of 6.5% to 7.5% After Pitching Dramas With Broader Reach

Jun 7, 2012  •  Post A Comment

By Brian Steinberg
Advertising Age

The CW has completed its upfront sales process, notching what is believed to be an amount similar to the $400 million to $420 million in ad commitments it secured from marketers in last year’s upfront.

CW secured CPM increases, or increases in the cost of reaching 1,000 viewers, of between 6.5% and 7.5%, according to a person familiar with the situation. In a sign that the market for TV advertising is not as robust as last year’s, the CPM increases are significantly smaller than the 10% to 12% that CW, owned jointly by CBS Corp and Time Warner, was able to secure last year.

The CW sold approximately 75% of its available inventory in the upfront, a sliver less than it did in last year’s session, when it sold between 75% and 80%, according to this person.

The figures suggest that advertisers are still willing to give a decent nod to TV, even though the medium has diminished somewhat in the face of a dizzying array of new technologies that siphon viewers away to digital venues, including mobile tablets and streaming-video players. Despite this trend, marketers say that TV still generates the most sizable audiences of young and middle-aged consumers who buy their goods.

The CPM hikes may come as a surprise, as the CW experienced notable ratings erosion in the last season, owing to some new shows that proved not to work ("Secret Circle," "H8R" and "Ringer") and its reliance on aging programs such as "Gossip Girl" and "90210."

Ad buyers were pitched on a bevy of new programs, including "Arrow," based on the Green Arrow comics character, and "Emily Owens, M.D." a sort of "Ally McBeal" meets "Grey’s Anatomy" starring actress Mamie Gummer as an ingenue physician making her way at a hospital. CW is pairing "Arrow" on Wednesday nights with its veteran drama "Supernatural" — long a resident of Friday nights — in a move that could help the network expands its reach from young women to young men as well.

Advertisers were also said to be interested in an expanded ad-sales plan that would allow them to run commercials not only alongside traditional TV shows, but also alongside online video streams of those programs when they were watched on the web or on mobile devices, such as tablets.

The CW is the first to publicly acknowledge it has wrapped up its upfront negotiations, though Fox is said to be nearing completion, winning CPM increases of between 7% and 9%. CBS, NBC and ABC all continue to negotiate with buyers. NBC is said to be notching CPM increases of between 5% and 7%; ABC is said to be winning CPM increases of 6% to 7% and CBS is said to be securing CPM increases in the high-single-digit-percentage to very low-double-digit-percentage range.

Univision is at least 40% complete with its discussions, according to a person familiar with the matter, with CPM increases in the mid-single-digit to high-single-digit percentage range, depending on the amount of dollar volume committed.

Cable has begun to move in earnest, according to ad buyers. Viacom may be near completion, as it sacrificed price hikes to generate more dollar volume, according to a person close to the company. Time Warner’s Turner has been active in discussions, these buyers said, and may even have begun to notch some deals.

One reason why CW may have wrapped up sooner than other broadcasters is because it does not have as deep of a relationship with General Motors as its bigger competitors. GM has stymied the broadcasters with demands to roll back CPMs by as much as 20%, according to ad buyers and other executives, and there is speculation in the market that some of the networks may be withholding deals on sports advertising to convince GM to back off its request. But CW has deeper relationships with Ford Motor and Kia, the latter of which places its cars in Friday-night drama "Nikita."

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