CBS' syndication properties-soon to grow with the company's proposed acquisition of King World Productions-might be in the mix as well.
MCD'S, FORD TALK 2-YEAR PACTS
McDonald's Corp. and Ford Motor Co. also were testing the waters last week, as both marketers had their media-buying agencies contact some broadcast and cable networks about possible two-year deals.
The upfront marketplace usually involves advertisers buying in advance time for the coming year, starting with the new fall season.
Word also surfaced last week that the 23 advertisers that make up the Forum for Responsible Advertisers-started by Johnson & Johnson-may be putting together a list of family oriented programming members could use to formulate targeted buys.
Philip Guarascio, general manager, group VP-marketing and advertising for GM in North America, said he's bullish on the concept of a network owner bundling its media properties for advertisers.
"We spend a billion dollars in the spot market. Where does it say that we have to keep that separate from our other spending?" he said.
Mr. Guarascio confirmed the auto giant was talking to a network about a multiproperty deal, though when asked if it was CBS, he declined further comment.
Other executives with knowledge of the situation said it was CBS and its CBS Plus program, which was set up for such package sales.
"It's very preliminary so far," said one of the executives.
A GM pact could be worth more than $50 million and would likely be a major part-if not all-of the automaker's upfront commitment to CBS.
Mel Karmazin, president-CEO of CBS, has been pushing his sales troops to make some major CBS Plus deals. Just last week, in announcing its $2.5 billion acquisition of King World, he said popular syndicated programs of King World-including "The Oprah Winfrey Show," "Wheel of Fortune" and "Jeopardy!"-would be included in the CBS Plus mix should advertisers be interested.
CBS also owns Eyemark Entertainment, whose syndicated properties include "Everybody Loves Raymond" and "Martha Stewart Living."
Mr. Karmazin said King World and Eyemark will remain separate as long as there is value in keeping the two apart.
A SELLER'S MARKET
A number of networks and agency media managers were puzzled about the inquiries that McDonald's and Ford were making about two-year deals.
"Everyone thinks this is going to be a seller's market, which means the buyers won't have leverage," said one agency executive. "So why would you do a two-year deal in this market?"
One reason, another executive said, was if you thought next year's upfront selling period was going to also be strong.
"But, what happens a lot of time is that a strong upfront sucks all the money up, as advertisers are afraid that scatter [time available during the TV season] prices will be even higher," he said. "Then, because most of the money's already gone, scatter is actually soft, which in turn leads to a buyer's upfront the next time around."
Last year's upfront sales came in at about $6.2 billion to $6.3 billion for the six broadcast networks, also including UPN and the WB. This year, it could hit or exceed $6.5 billion, some buyers and sellers are saying.
Most of Ford's discussions have been with cable networks. The marketer spent most of its upfront budget for Lincoln-Mercury on cable TV last year. Cable insiders are expecting to get that money this year, as well as more spending for some of the No. 2 automaker's other brands.
With broadcast network viewership declines continuing, it takes larger buys for advertisers to reach the gross ratings points they need via the networks. That drives prices up.
"The big question in everyone's mind," said one cable network sales executive, "is when will advertisers get off that merry-go-round? They keep feeding the broadcasters more money as their viewership continues to go down."
Broadcast networks counter that they're still the only place to reach mass audiences efficiently.
With viewing at the four major networks-ABC, CBS, Fox and NBC-off about 7.5% in adults ages 18 to 49 this season, the networks have to write cost-per-thousand increases equaling that to stay even. And if networks hold more inventory back for scatter, they have to get even higher CPMs to stay even.
Unfortunately for the cable networks, while they should have a strong upfront, big CPM increases on the broadcast network side would make it virtually impossible for them to close the CPM gap.
Upfront sales for kids programming, which usually starts things off every year,