CBS Wraps Upfront With Volume Close to Flat — Gets Price Increases of 8% to 9%, Sells Slightly Less Inventory Than Last Year

Jun 13, 2012  •  Post A Comment

By Brian Steinberg
Advertising Age

CBS has largely completed its upfront sales, notching ad commitments estimated to be on par with the $2.5 billion to $2.75 billion it notched in last year’s upfront, according to a person familiar with the situation.

The network, which has the most stable prime-time lineup among the big broadcasters, was able to secure increases in the cost of reaching 1,000 viewers, a metric also known as a CPM, in the range of 8% to 9%, according to ad buyers and other people familiar with the pace of discussions. The total dollars committed were said to be roughly even with last year’s total or slightly higher. Last year’s totals are based on Ad Age estimates derived from people familiar with the situation.

CBS sold slightly less inventory than it did last year, when it distributed 80% of its upcoming season’s ad time to sponsors. The network’s decision to hold a small amount back — a move that echoes CW’s upfront strategy — suggests that the upfront market is not as robust as hoped and that TV networks will hold more time in reserve than last year to sell as "scatter," or ad time purchased more close to air date. Scatter advertising is typically sold at a premium, unless the economy weakens as the TV season launches and continues to be lackluster when the holiday season looms.

In another indication of a slightly shakier market, CBS’s CPM increases came in lower than the 13% to 15% hikes it won last year.

As negotiations continued over the past few weeks, it became evident that advertisers weren’t as eager to spend as they were last year, according to ad buyers and other executives. Movie studios have fewer big releases in the months ahead, one of these executives said, and there is speculation in the market that Procter & Gamble may have trimmed its spend somewhat. One executive suggested economic worries in Europe and a recent downturn in the stock market had prompted marketers to draw their pursestrings tighter.

It remained unclear whether CBS had struck any upfront deals with General Motors, which has been pressing for steep rollbacks in the prices it pays for upfront inventory. GM is a strong CBS advertiser, and has enjoyed prominent placement in "Hawaii Five-0" for the past two seasons. The series’ protagonists drive Chevrolet vehicles while the program’s ad breaks abstain from featuring rival automakers. The network’s decision to hold back some time for scatter could suggest that it refrained from doing much business with the automaker.

According to ad buyers and other media executives, all the broadcast networks kept GM and its media agency, Carat, at bay until they were able to complete negotiations with other large ad-buying shops and sponsors. By following that strategy, the networks were able to make the point that their deals with other large advertisers, such as Procter & Gamble, did not include large rollbacks, and that they could not accommodate GM’s demands without hurting their business.

TV networks told GM, "We’ll see you at the end of the market," said one media executive. "People put it aside" to do business elsewhere and establish a solid bar for pricing, the executive said.

All the big networks are now believed to be largely complete with their upfront dealings. News Corp.’s Fox is believed to have notched CPM increases of around 7% to 9%; Walt Disney’s’s ABC is believed to have secured CPM increases of around 6% and7%; and Comcast’s’s NBC is believed to have secured CPM increases of around 5.5% and 6.5%, according to people familiar with the pace of talks.

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