It’s shaping up as a very merry Christmas for children’s television.
The kids TV advertising market is seeing sharp price increases in the fourth-quarter scatter market-especially for cable outlets such as Nickelodeon, Cartoon Network, and Kids’ WB and Fox Box.
Commercial time for spots aimed at children 2 to 11, the most popular category, are being sold at 20 percent to 25 percent cost-per-thousand viewers (price increases over what was paid during the upfront sales period this past May. All this comes during the final quarter of the year, which is already a busy time for advertisers.
During the final three months, between 40 percent and 50 percent of all TV kids advertising will air. Most of that will appear during the so-called “hard eight” period that runs this year from Oct. 7 to Dec. 7. During those eight weeks, close to 80 percent of all TV ads will be placed. This is to support sales efforts during the holiday season, which is by far the biggest retail sales period for kids toys and other kid-friendly purchases.
In one of modern TV’s great continuing ironies, the kids market is also seeing increases at the same time ratings are down, just as occurred with the overall market earlier this year. Declining kid ratings across virtually all kids programming networks have helped spike up prices. In other words, buyers have to pay more for less, because finding viewers in any one place is ever more difficult.
In the case of the kids market, Disney Channel, which doesn’t run advertising, also has an impact because it attracts a lot of the target audience. “Everyone is off a tick,” said John Wagner, senior VP, media director of Publicis Groupe’s Starcom Media Group. “Disney Channel is up. To everyone’s chagrin, they continue to take commercial ratings points and turn them into noncommercial rating points.”
The last-minute surge of holiday advertising aimed at children follows the strong performance for most of the same networks during the upfront. According to executives, in the spring the kids market enjoyed an 8 percent to 10 percent increase to some $700 million for the 2003-04 broadcast season. Major TV kids purveyors-Nickelodeon, Cartoon Network, and Kids’ WB-scored high-single-digit CPM increases, according to media sellers. Media buyers said deals were inked at low-single-digit increases. The highest increases earlier this year were for the holiday period.
“The market did grow,” said Shelly Hirsch, CEO of Summit Media Group, a New York- media buyer for a number of toy companies. “Our business went up 18 percent.”
Entering the fourth quarter, the problem is one of inventory. Though prices are high, most kids programming networks aren’t reaping a major revenue windfall since there isn’t a great deal of advertising availability’s to sell. Most of the time was committed during the upfront. One exception is Nickelodeon, which had ad space it held back and can now sell at higher prices.
“It’s been a very healthy kids market,” said Jim Perry, senior VP of advertising sales for Viacom’s Nickelodeon.”[Overall] we are up in the high teens in terms of revenue for the fourth quarter.”
Time Warner’s Cartoon Network has limited fourth-quarter scatter inventory-less than other networks-because it sold off most of its available time during the upfront, including massive deals with General Mills and The Kellogg Co., according to media executives.
“The packaged goods category has been the healthiest over the last nine months,” said Kim McQuilken, executive VP of sales and marketing for The Cartoon Network, which also sells advertising for its sister network, Kids’ WB. “That certainly has affected our inventory position. However, keep in mind that category is more year-round-balanced, so there is not the emphasis in the fourth quarter as there is for the toy manufacturers. It’s not fair to say that we have a high sellout situation in the fourth quarter because of that category.”
Cartoon Network’s main goal is getting to pricing parity with Nickelodeon. Cartoon Network still sells at about a 30 percent discount to Nickelodeon, according to media buyers. For example, where Nick would get an $8 CPM on a particular ad buy, Cartoon gets a CPM of $5.60.
Media buyers report much of the increase comes from entertainment categories. Additionally, toy companies have been spending money on top of what they spent in the upfront.
Though the fourth quarter has been well sold for kids marketers, plenty of ad time is available for the first, second and third quarters of 2004, say media buying executives.