Kids' upfront TV market loses shape

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The $760 million kids TV upfront advertising market is being radically transformed by marketer consolidation. So while media sellers expect to realize slight program price increases this year, they'll do it without the traditional, defined upfront rituals.

"We're now in the world where there's no defined [upfront] market," said Jon Mandel, co-managing director of Grey Global Group's MediaCom, New York. "It just sort of goes along and people do it whenever they feel it is right for them. The traditional kids upfront is very passe."

Added an executive with a leading cable network, "Everyone is writing business 52 weeks a year. We are doing deals right now."

Advertiser consolidation is one reason for the diminishing kids upfront market. Fewer TV buyers concentrating on the kid market-because of toy manufacturer mergers and food industry consolidation-means less pressure to beat the competition to the punch. In the package-goods arena, last year's Kraft Foods-Nabisco merger had a sobering effect on the market, and the completion late last year of the Pillsbury Co./General Mills marriage could do the same. "There's been such consolidation. ... They're only competing with themselves, so there's less need to go hog wild," Mr. Mandel said.

Long-term cross-media packages crafted by companies such as Viacom and Walt Disney Co. have also taken money out of the upfront.

A limited kids' upfront market is still expected to unfold in April, significantly earlier than last year, when it was delayed until June. Buyers and sellers estimate about 30% to 40% of the $760 million will be spent around a traditional upfront period.

Media sellers anticipate cost-per-thousand price gains in the low single digits. "It should be up a little bit," said Karl Kuechenmeister, senior VP-ad sales at AOL Time Warner's Turner Kids Television, which includes The Cartoon Network, the No. 2 network behind Nickelodeon in kids advertising revenue. "It's going to be a little bit up-but we don't know how much is going to be in the upfront," said Laura Nathanson, a senior sales executive at Disney's ABC Family.

Any hikes would be the result more of reduced supply than increased demand. According to one cable network's estimate, there will be 44 fewer kids programming hours in the 2002-2003 TV season than there are this year in part because News Corp.'s Fox Kids Network and AOL Time Warner's WB are cutting their kids' programming blocks.

Viacom's Nickelodeon controls 50% of the overall kids market in terms of ad revenue, while the Cartoon Network pulls in about 25%. That leaves Disney properties, Kids WB, General Electric Co.'s NBC, Fox Kids Network and other sellers to split the remaining 25%.

In terms of ad categories, spending by both food and toy marketers is expected to be flat or down slightly compared to last year. But spending in such areas as entertainment, video games, computer hardware and software and films is expected to rise.

Another part of the equation is ad spending. Toy manufacturers' spending may be at the same levels or down vs. a year ago, according to executives. Food companies are also not expected to spend much more than a year ago. Entertainment, electronics, games, software, hardware and movies are all expected to spend more, but these advertisers target older kids, ages 6-11, especially boys.

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