Merrill Lynch Predicts Stronger 2007 Upfront Sales

Mar 28, 2007  •  Post A Comment

Merrill Lynch is forecasting that the 2007 upfront advertising market will be much stronger than last year.

“We believe CPM [cost-per-thousand] pricing in the upfront market could increase mid single digits and overall commitments should be up low single digits plus (constrained by ratings) depending on sell out level,” analyst Jessica Reif Cohen said in a research report Wednesday.

Ms. Cohen said her outlook was based on a tight market for scatter advertising, the spots sold closer to airtime, and the demand for commercial time spurred by elections and the Olympics.

ABC should again be the leader in setting prices in the upfront, Ms. Cohen said. Fox is in good position as well, having capitalized on “American Idol.” She said NBC appears to have stabilized its schedule, while “CBS has the most to prove to advertisers” because of rating losses on Thursday night, the key night for big spending by movie, retail and automotive marketers.

She sees Fox’s commitments rising 6 percent to $1.8 billion, ABC’s gaining 5 percent to $1.93 billion and NBC increasing 5 percent to $1.93 billion. CBS and the CW are expected to be flat, while MyNetworkTV will be down 20 percent to $40 million.

Merrill Lynch is projecting that cable will be up 3 percent, as will syndication.

Ms. Cohen said that the network are likely to see bigger digital sales this year than in last year’s upfront market, when those packages were minimal, at about 2-3 percent of total upfront advertising commitments. This year, digital could represent more than 5 percent of upfront deals, she said.

(Editor: Baumann)