The $760 million kids TV upfront advertising market is being radically transformed by marketer consolidation. So while media sellers expect to realize slight program price increases this year, they’ll do it without the traditional, defined upfront rituals.
“In order to have an upfront market, you need to have a marketplace that forms,” said Jon Mandel, co-managing director of Grey Global Group’s Mediacom, New York. “We’re now in the world where there’s no defined market. It just sort of goes along, and people do it whenever they feel is right for them. The traditional kids upfront is very passe.”
Added an executive with a leading cable network, “Everyone is writing business 52 weeks a year. We are doing deals right now.”
Advertiser consolidation is one reason for the diminishing kids upfront market. Fewer TV buyers concentrating on the kids market-because of toy manufacturer mergers and food industry consolidation-means less pressure to beat the competition to the punch. In the packaged goods arena, last year’s Kraft Foods-Nabisco merger had a sobering effect on the market, and the closure late last year of the Pillsbury Co./General Mills marriage could do the same.
“There’s been such consolidation in the advertiser ranks, and they’re only competing with themselves, so there’s less need to go hog wild,” Mr. Mandel said.
Long-term cross-media packages crafted by companies such as Viacom and The Walt Disney Co. have also taken money out of the upfront. Such deals could also have a significant impact on the $6.8 billion network prime-time upfront market, which traditionally unfolds in late spring and which has faced its own significant challenges in recent years.
Spending projections
On the kids front, a limited upfront market is still expected to unfold in April, significantly earlier than last year, when it was delayed until June. Buyers and sellers estimate about 30 percent to 40 percent of $760 million in kids TV dollars will be spent around a traditional upfront period.
Media sellers anticipate cost-per-thousand price gains in the low single digits. “It should be up a little bit,” said Karl Kuechenmeister, senior VP of ad sales at Turner Kids Television, which includes The Cartoon Network, the No. 2 network behind Nickelodeon in kids advertising revenue.
“It’s going to be a little bit up-but we don’t know how much is going to be in the upfront,” said Laura Nathanson, a senior sales executive at ABC Family. “It’s not going to be a huge increase.”
Any hikes would be the result more of reduced supply than increased demand. According to one cable network’s estimate, there will 44 fewer kids programming hours in the 2002-03 TV season than there are this year-in part because the Fox Kids Network and The WB are cutting their kids programming blocks.
Nickelodeon controls 50 percent of the overall kids market in terms of ad revenue, while the Cartoon Network pulls in about 25 percent. That leaves Disney properties (including ABC’s “Disney One Saturday Morning” and ABC Family), Kids’ WB, NBC, Fox Kids Network and other smaller sellers to split the remaining 25 percent.
In terms of ad categories, spending by both food and toy marketers is expected to be flat or down slightly compared with last year. But spending in such areas as entertainment, video games, computer hardware and software and films is expected to rise.