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Turner Upfront Goes on a Diet

Jul 8, 2007  •  Post A Comment

The fun and games quieted down last week at Turner Broadcasting, where reduced ad spending by food companies held upfront commercial sales flat in the kids advertising market.
Turner, which owns cable networks including the Cartoon Network, said food marketers appear to be shifting spending to more adult-oriented products as lawmakers and regulators tackle childhood obesity.
“We finished the majority of our negotiations late Tuesday night,” said David Levy, Turner’s president of sales, estimating he had completed between 80 percent and 85 percent of his upfront business. “I’m pretty pleased with the results at this point.”
The majority of kids advertising revenue is garnered during the fourth-quarter holiday weeks, called the “hard 10,” as well as Easter and back-to-school in September.
Mr. Levy said for those traditional high-demand periods, Turner’s ad prices increased by high single-digit percentages on a cost-per-thousand-viewer basis, while revenue grew at a low double-digit rate.
For the rest of the year, price increases were smaller because of cutbacks by the food companies, which are 52-week advertisers.
“They’re obviously still advertising to kids, but at a much different level, and the messaging is different,” Mr. Levy said. “Most of them are focusing on their healthy line of products.”
Mr. Levy is expecting a strong scatter market, where advertisers buy spots closer to airtime, to bring up revenues for the year.
Turner was among cable networks this year that began to negotiate upfront deals based on how many viewers watch commercials, rather than the programs the spots run in.
The company did kids business on both the new, commercial ratings standard and the established currency of program ratings.
“We are open to hear what the clients’ and agencies’ needs and wants are,” Mr. Levy said.
Mr. Levy said video game makers and movie studios jumped back into the market in a big way. Last year, game makers stayed away before the introduction of Sony PlayStation 3 and Nintendo’s Wii.
Turner also posted double-digit growth in digital media for kids.
Mr. Levy estimated kids digital sales, including video-on-demand offerings, represented about 10 percent of overall ad revenue.
“It’s a small but growing part of the business,” he said.
Viacom’s Nickelodeon, the top-rated kids network, last month announced a $100 million deal with media buyer Starcom that was based on quarter-hour program ratings.
Nickelodeon officials did not return calls seeking an update on the network’s upfront sales.
Kagan Research estimated Nickelodeon will generate $1.3 billion in ad revenues in 2007. Cartoon Network is expected to produce $409 million in ad revenues.

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