The market was up 13% to $850 million last year and wrapped up in five days. But amid toy-retail turmoil and pressure on food marketers, the going is more sluggish this year. Predictions call for a rise of about 6% to $900 million.
Viacom's Nickelodeon and Turner's Cartoon Network last week began to cut deals in the food, movie/DVD and toy categories, though the bulk of the volume is expected to happen this week and finish before broadcast network presentations begin May 16.
Nickelodeon senior VP-Ad Sales Jim Perry said 90% of the budgets have been submitted with "a fairly significant amount of business closed." Cartoon Network reportedly had all of its budgets registered by April 29 and had sold 10% of its inventory. Disney's ABC Family hasn't closed deals but is in negotiations.
"Last year was a market that opened and closed in about five days," said Mr. Perry. "This year it'll be slightly more drawn out. But we're doing upfront deals year round tied to licensing, promotion and marketing agreements." He expects to wrap up his sales by the end of the week.
In February, Sue Danaher, Nickelodeon exec VP-general manager of sales, predicted a 10% rise in the kids' upfront to around $935 million. An executive at another network, however, said last week it is likely to be a more modest 6% to 7% increase.
The deals come despite reports that as of late last week several buyers were in a standoff over price, with sellers asking for high-single digit CPM increases after last year's double-digit increases. Mr. Perry, however, said Nick has closed with double-digit increases.
Sheldon Hirsch, CEO of Summit Media, buys for around 30 clients. He said he hadn't yet closed any deals but had an understanding with Nickelodeon and had yet to take a look at the Cartoon Network schedule.
Most of the current business is from marketers vying for time in the period from Halloween to Christmas, when toy manufacturers and movie companies spend the bulk of their advertising budgets. Price negotiations typically center on this valuable time period. Last year it commanded 15% to 20% premiums; this year, Mr. Perry estimates it's going for slightly less.
With issues about marketing to kids front and center and the FCC affecting supply with new regulations on how ad minutes are counted, there are several unknowns that make the market difficult to call.
The future of Toys "R" Us has significant implications for the market since it's a big spender. Last year Toys "R" Us cut its network TV budget almost in half to $33 million but increased its cable TV budget 36% to $18 million, according to TNS Media Intelligence. Kraft also could influence the market, based on its decision to curb fatty-snacks ads.
"What [marketers are] changing is really around the message and what product they're advertising," said Tricia Wilber, senior VP-ad sales for Disney/ABC's cable networks. "We don't foresee a change or shift or reduction of dollars in that area."
contributing: claire atkinson