And a weaker market has some media buyers wondering what the long-term impact will be on the kids upfront.
"All you have to do is look at toy companies' stock prices," said Jon Mandel, co-managing director of MediaCom, the media buying agency of Grey Advertising, New York, which controls a significant portion of national TV buying for kids programming through toy companies such as Hasbro.
Hasbro and Mattel have both seen falling stock prices. On Feb. 3, Mattel's stock was near its 52-week low at $10.88 per share as was Hasbro at $16.44.
Mattel's problems stemmed largely from its troubled acquisition of the Learning Co. Conditions became so bad, according to one executive, that Mattel asked media sellers for significant cutbacks on TV buys during the normally busy fourth quarter. Last week, embattled Mattel CEO Jill Barad resigned.
SPENDING MAY DROP
Stock woes are a signal, according to Mr. Mandel, that the market could see a drop this year -- especially in the $800 million a year spent in national kids TV programming. That will most likely mean single-digit percent decreases in CPMs for certain programming.
"[Media] budgets are down, and many [toy budget] lines are down because of consolidation," said Matthew Maginley, senior VP-associate media director of national broadcast at Towne, Silverstein, Rotter, New York.
Media buyers say compounding the situation is the fact that cereal companies such as Kellogg Co., a major buyer of kids TV programming, continue to redirect media spending toward adult-targeted products.
All of which is changing the face of upfront. In previous years, a hot kids market could see deals completed in late January or early February. But now cash-conscious advertisers are buying closer to the start of the fall season, when they have a clearer picture of how much they need to spend. Mr. Mandel predicts the market will take place April, the same as last year.
Some media buyers are increasingly focusing less on the upfront market and moving their media buys into the scatter market -- buying TV time on a quarter-by-quarter basis.
"There will be no need for an upfront market any longer," predicts Shelly Hirsch, chief executive officer of Summit Media Group, New York, a producer and media buyer for kids-targeted advertisers. "It's not necessary. Right now supply has exceeded demand [in terms of kids ratings points]."
Advertisers typically use the upfront to lock in buys for certain high-demand periods, such as the six weeks before the end-of-the-year holiday season.
Still, media sellers are optimistic. "I would hope the market improves," said Rick Sirvaitis, president of advertising for Fox Family Worldwide, the parent of Fox Kids Channel and Fox Kids Network. "Part of our push is to get new advertisers in the market."
Turner Broadcasting advertising sales executives point to specific categories that are positioned to pick up the pace. "Computers, fashion, personal hygiene and videogames -- they are all growing categories for our business," said Karl Kuchenmeister, senior VP-advertising sales for the Cartoon Network.
Nickelodeon is likely to play a major role in the upcoming marketplace because many of its two-year ad deals expire after this season. "It's a jump ball for a lot of that money," said one competing network advertising sales executive.
Some cable and broadcast networks have made big ratings gains this season, and are destined to get a bigger piece of the advertising pie.
The Kids WB's "Pokemon," distributed by Summit Media Group, rocketed the network to a Nielsen Media Research National Television Index rating of 2.9 among kids ages 2 to 11, for the season to date through Jan. 23 -- a 142% increase over Saturday morning numbers for the year-ago period. It's rating among kids 6 to 11 climbed 175%.
The Cartoon Network is also an increasingly major factor in the kids marketplace, with its overall ratings among kids 2 to 11 climbing 5% to 2.0 for the season-to-date, and its ratings for kids 6 to 11 up 21%, to 1.7.