This year’s kids upfront will be an uphill battle for children’s networks, say experts, who predict ad sales will have a hard time matching last year’s levels.
With the economy softening, toy and cereal makers still on the rebound and more kids ratings points available this year, experts predict a tough upfront ride for TV’s children’s networks with many advertisers tightening their budgets.
“It’s definitely going to be a buyer’s market,” said Debbie Solomon, media buyer for J. Walter Thompson. “There just doesn’t seem to be a lot of pent-up demand out there. Everybody is cautious this year-that applies across the board.”
But kids network executives are keeping a stiff upper lip, asserting that upfront now happens 12 months a year, new advertisers are filling the hole left by traditional ad buyers, and multiple-platform ad packages can command more ad dollars.
Last year’s TV kids market generated an estimated $750 million, with cable accounting for $450 million or 60 percent of the total, according to industry estimates.
This year’s kids upfront won’t significantly top that, say media buyers. Most predict that kids cost per thousand (CPM) will increase only modestly over last year or remain flat.
“The buyers are certainly not expecting much if any increase in CPMs,” Ms. Solomon said. “They’re not expecting it to be dramatic this year. The upfront could be flat to slightly higher this year.”
“We’re not talking about a huge increase in upfront dollars,” noted another media buyer, who requested anonymity. “Will it be $760 million instead of [last year’s] $750 million? I don’t know.”
Shelly Hirsch, kids media buyer and president of Summit Media Group, painted an even tougher kids upfront picture.
“After two large toy manufacturers-Mattel and Hasbro-suffer from overexpansion, their ad budgets are down,” Mr. Hirsch said. “If last year was bad, wait until you see this year. It will be worse.”
Not surprisingly, kids network executives don’t see quite as bleak an upfront picture.
“Maybe it [kids upfront] isn’t as bad as the press is saying it is,” said Gary Montanus, senior vice president of Disney Kids Network, which last year consolidated its kids sales for Disney, ABC and Buena Vista under one roof. “We’ve had both advertising clients who tell us their ad budgets are up and others who tell us that their budgets are down.”
Other network executives concede the ’90s boom years for kids advertising may be over.
“We’ve had boom years for the past seven years, and now things have slowed down,” said Karl Kuechenmeister, senior vice president of sales and marketing for the Cartoon Network. “But it’s not a car crash. It’s not a slam on the brakes. It’s a slowdown. It’s a cyclical trend we’re in now, and we’re not sure when it’s going to end.”
But other kids network executives say upfront isn’t as big a deal as it used to be. Ad sales, they say, are no longer confined to the annual two-week upfront ad-selling frenzy but are now a year-round business.
“For us it’s become a 52-week selling season; we’re constantly doing scatter throughout the year,” said Bill Morningstar, senior vice president of media sales for The WB.
“The biggest chunk of advertising time in the kids marketplace is sold throughout the year,” said Sue Danaher, executive vice president and general sales manager for Nickelodeon. “That upfront window of frenzied time-that actually represents a very small portion of the kids marketplace.”
Kids networks did get some good news this year. A report by TN Media indicated that more children are watching kids programming now than in the past five years.
But the bad news is that with new players such as Toon Disney, more kids ratings points are now available for advertisers to buy, giving buyers the edge.
“You have so much out there,” Summit’s Mr. Hirsch said. “You now have Discovery Kids, Odyssey Kids, Pax Kids, your kids, my kids. There are more than enough ratings points right now to satisfy everybody’s needs.”
Broadcast networks Fox, The WB and ABC lost children’s viewership last year, which is likely to give them less leverage at the upfront bargaining table and cause dollars to shift over to kids cable networks.
Season-to-date, all three broadcast networks are down in kids 2 to 11 on Saturday mornings compared with last year. Both ABC and kids daypart ratings leader The WB are down 25 percent, and Fox is down 14 percent.
Nickelodeon padded its already sizable market share by programming CBS’s Saturday morning block with Nick Jr. starting last May. CBS, which inserted Nick Jr. last fall, is up 171 percent on Saturday morning over last year for the time period.
While CBS’s new Nick Jr. block is drawing kids from the other broadcast networks, experts cite other reasons for the shift.
“The WB must be disappointed that its `Pokemon’ was so short-lived,” Ms. Solomon said. “Usually a really hot kids program can have a four- to five-year life span. With `Pokemon,’ how long has is been? Not even two years.”
Experts said specialized kids networks have an edge over their broadcast competition in getting nontraditional advertisers to plunk down some of their money.
“One of the lures of getting nontraditional advertisers in is that value added,” Mr. Hirsch said. “They have the ability to tie in promotions, whereas the broadcast networks do some, but they don’t have the flexibility like Nick and Cartoon.”
Kids viewership may shift again this year when Fox Kids allows station affiliates to roll back their kids after-school block to 2 p.m. to 4 p.m. from 3 p.m. to 5 p.m.
Fox’s competitors say the network may be giving up on the kids market.
“What this is signaling is that the Fox stations really don’t care about the kids business,” Mr. Kuechenmeister said. “This is a huge development this year.”
While toy and cereal makers may spend less this year, kids network executives say new advertisers are coming to market to reach kids. They point to a slew of new nontraditional advertisers such as companies selling personal computers, personal products and packaged goods coming in to offset the soft spot in toys and cereals.
Network executives say such nontraditional advertisers will help take up the slack. “Advertisers are surfing down a little bit and realizing how important kids are in a lot of different purchasing decisions,” The WB’s Mr. Morningstar said.
Nickelodeon last year added three new big-league advertisers: Gateway Computers, Embassy Suites and Ford Motor Co.
Nickelodeon says it’s drawing new advertisers by pitching a new viewer demographic: work-at-home moms. The network this year inked a deal with manufacturer Kimberly-Clark, which bought ad time on Nick Jr.
“We’re now marketing Nickelodeon to advertisers who want to reach moms,” Ms. Danaher said.
Along with new advertisers, kids networks boast that they’re drawing new ad dollars by offering advertising packages that spread an advertiser’s message over several platforms.
“A network like Cartoon Network that owns its programs and copyrights and Web sites can bring a lot to an advertiser to entice them to sign up for multiyear deals,” Mr. Kuechenmeister said. “Even though it’s not the strongest marketplace, some people will see great value in doing multiyear deals.”
Barbara Bekkedahl, executive vice president of ad sales for Fox Family Worldwide, which includes Fox Kids and Fox Family Channel, said the network now pitches clients to buy “integrated promotions with our Web site, our magazine and our radio.”
Fox Family Channel last year shifted to more family-oriented and young teen fare, which executives say is drawing new advertiser dollars.
“We’ve been able to bring in new advertisers and new money because of that `tween’ skew,” Ms. Bekkedahl said. “A lot of big companies like Kraft, Nabisco and Procter & Gamble are recognizing that the kids 9 to 14 years old market is important and that Fox Family is really delivering on that demo.”
Fox Family Channel is adding two comedies this spring aimed at “tweens”-kids 9 to 14
years old-including “Braceface,” an animated series about a teen-age girl who can hear others’ conversations through her braces. Actress Alicia Silverstone provides the voice of the main character.
Nickelodeon hopes it can draw fresh ad dollars from movie companies and footwear makers with its three-hour Sunday night block for tweens that launches March 4.
Nickelodeon said expanding its program reach to different kids demographic groups has translated into drawing new advertisers.
“We have Hispanic shows on the air that have enabled us to access money that otherwise would not have been active in the general kids arena,” Ms. Danaher said. “That’s new money that otherwise we would not have been able to access.”
Experts predict that this kids upfront, like last year’s, will stretch out to mid- to late April. Some advertisers, they say, will hold upfront money back for scatter in hopes of getting a better deal.
“With the softness in scatter we’ve seen so far, we have clients that ask us, `Is it necessary to tie up my money now?”’ one media buyer said. “It’s hard for us to say yes.”