In Depth

CBS, NBC, Fox Start Making Ad Deals as TV Upfront Comes to Life -- NBC Seeking Ad Rate Increases Above 8%

By Jeanine Poggi
Advertising Age

After what has been a quiet few weeks following broadcasters' presentations, the upfront marketplace is finally starting to move.

NBC, Fox and CBS have started securing ad commitments as part of this year's upfront negotiations for ad time in the approaching TV season, according to people familiar with negotiations.

The pace suddenly appears to be moving quickly, with NBC moving through the market "briskly," the people said.

NBC is seeking increases in the cost of reaching 1,000 viewers of more than 8%. Last year, NBC secured price hikes between 7% and 8%.

The peacock's deals are being fueled by its recent ratings strength, ending last season as the No. 1 most-watched network among adults 18-to-49 for the first time in a decade. It is also seeing interest in its NBCU+ Powered by Comcast addressable advertising offering, and Symphony, its cross-network promotional strategy.

Fox has started writing business with movie studios and is believed to be securing rate hikes below last year, when it won increases between 5% and 7%.

Movement in the market comes after GroupM struck agreements with the major broadcasters earlier in the week to negotiate deals on a C7 basis, meaning it will pay for commercial ratings through seven days of airtime rather than the three days that is standard now. Other media agencies said they would not follow suit with similar broad-based agreements but have done some C7 deals in the past and will consider them on a case-by-case basis.

The upfront marketplace got off to a slow start partly because advertisers' budgets were only creeping in -- and seemed perhaps smaller than networks hoped.

In last year's deal-making, NBC secured $2.1 billion in ad commitments, a 20% increase from 2012.

CBS snagged anywhere from $2.5 billion to $2.75 billion, essentially flat with the year prior, and secured price hikes between 7% and 8%. CBS continues to be the most-watched network in total viewers.

Fox secured $1.8 billion in upfront commitments, a decline from $1.99 billion in the year prior.

Fox ended the season in last place among the big four in total viewers, and in third in the 18-to-49 demo.