TV Nets Pull Off $9.2 Billion Upfront by Satisfying Buyers' Need for Mass

CBS Scores Largest Take, and CW Commands Highest CPM Increase

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A correction has been made in this story. See below for details.

NEW YORK ( -- Marketers got their wish with commercial ratings, but as the adage says, be careful what you wish for.
ABC sales chief Mike Shaw, whose network pulled in $2.4 billion in this year's upfront, says that network television is still the best place for marketers to find an audience.
ABC sales chief Mike Shaw, whose network pulled in $2.4 billion in this year's upfront, says that network television is still the best place for marketers to find an audience.

Despite forecasts to the contrary -- and a brand-new currency that measures ratings on ads vs. the total program -- prime-time broadcast TV wrung increases from marketers this year in the cost-per-thousand rates they paid and in the number of dollars, $9.19 billion, that were committed to upfront sales. Last year, the networks were credited with booking $8.95 billion. Networks such as the CW and CBS managed to win high-single and low-double-digit increases in CPM viewers, even with a decline in overall ratings from the previous season.

This year's preferred currency -- measuring average commercial minutes plus three days of time-shifted viewing -- was applied on a near-universal basis across all dayparts, with about 5% of ABC's deals comprising other metrics, such as live and live-plus- same-day, and a handful of deals at NBC making similar exceptions. Even movies and retail, two categories expected to hold out for deals based on live ratings due to their timely messages, did the bulk of their business based on metrics that include viewers who watch programs using a digital video recorder, who account for 3% of all TV viewing, according to Nielsen.

Good year for a few
Marketers' spending boosted three of the five networks' total hauls. CBS took the most this year, with $2.45 billion (last year's tally: $2.4 billion); followed by ABC with $2.4 billion (up from last year's $2.2 billion); Fox with $1.9 billion (vs. last year's $1.8 billion); NBC at $1.8 billion; and the CW with about $640 million. NBC was down from its 2006 total, $1.9 billion, as was the CW, which was credited with $650 million last year.

In terms of CPM, the CW boasted the largest increases of the season, estimated to be 10% to 11%. It was followed by CBS with 8% to 9%, Fox with 7.5% to 9%, ABC with 7% to 9%, and NBC at 4% to 6%.

The networks' ability to secure increases is surprising, since the upfront market was flat to down in recent years, especially compared with the 2003 high of $9.5 billion, and live ratings declined this past TV season. The switch to commercial ratings also meant a 5% to 10% drop in the number of viewers who watched the ads compared to the programming. But the TV networks touted their ability to reach broad audiences in an increasingly fragmenting media landscape and asked for more money. They also demanded that they get paid for DVR viewers.

Networks are place to be
"A lot of people who went to market did not plan their budgets based on commercial ratings," said ABC sales chief Mike Shaw. "The point is, more commercials are being seen on the networks than any other video alternatives."

Mark Gibson, assistant VP-advertising for State Farm, said he thought the week's broadcast deals went well in terms of meeting and exceeding the goals and objectives he and his agency, OMD, expressed to the networks going in. But with cable and syndication around the corner -- and cable becoming an increasingly vast space to attain broadcast-level reach in prime -- the insurance marketer still has a good chunk of change left to spend.

"Obviously there's still a place for broadcast prime, but this year, from our perspective, cable continues to play an increasing role in what we do," he said. The kids' upfront kicked off last week as well, with a deal between Viacom's Nickelodeon and Starcom that comprises the various platforms in the Viacom Kids and Family Group. The network and the agency will also team for a series of research projects in late 2007 and early 2008 to illuminate kids' changing media consumption.

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CORRECTION: A Fox spokeswoman said the network's CPM increases in its upfront sales were 7.5% to 9%, not the 5% to 7% Ad Age estimated based on media buyers contacted.
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