Also See the Upfront Butterfly Girls

TV UPFRONT MARKET ABOUT TO TAKE OFF

Expectations of Sharp Price Increases Drive Action

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NEW YORK (AdAge.com) -- Television's advertising upfront market is set to take off quickly following the close of the final network
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TV UPFRONT MARKET ABOUT TO TAKE OFF
Expectations of Sharp Price Increases Drive Action

upfront presentation today by News Corp.'s Fox, with prices expected to move up sharply. Initial deal talks will start tomorrow, according to a number of media agencies and buyers.

The upfront advertising market takes place following the network's program presentations, which occur in mid-May. The upfront is a freewheeling auction in which advertisers make year-long commercial commitments to the networks. In strong markets, upfront deals can be done in a couple of days. Weaker markets can drag on for months. This one is moving swiftly.

Overall sales increase
Some media buyers now say overall advertising sales revenue could be up more significantly than previously thought for the broadcast networks. Increased amounts of sales as well as increased prices could push the overall take up 8.8% above last year's $8.1 billion.

"I'm submitting budgets tomorrow to the network because I can't chance prices are going higher," said one veteran advertising buyer at a medium-size media agency.

It's estimated networks will be asking for anywhere from 12% to 18% increases on the cost-per-thousand (CPM) viewer increases -- though they'll settle for somewhat less. Media buyers estimate deals will be struck at gains of 5% for Viacom's UPN, 6% for Walt Disney Co.'s ABC, 9% at Viacom's CBS, 10% for General Electric Co.'s NBC, 11% for Fox, and 15% for AOL Time Warner's WB.

Exuberant Mel Karmazin
Asked about when the upfront will move, an exuberant Mel Karmazin, president-COO of Viacom, during the CBS after-party presentation yesterday

Adding color outside virtually all Manhattan upfront venues during the week were the MSN butterfly girls -- part of a campaign urging upfront buyers to include online elements in their plans. Click to see larger photo.

said: "Maybe not exactly Monday. But at least by the end of the week."

Still other executives said discussions concerning upfront deals have been broached this week, including major media agencies discussing "concept" deals -- which are put together with a specific budget and CPM increases -- with viewer estimates to be factored in later.

Already started
The largest agencies, such as Interpublic Group of Cos.' Magna Global, a media negotiating unit for Universal McCann and Initiative Media Worldwide, and Omnicom Group's OMD, have already started the process, said executives who spoke to AdAge.com.

Steve Pacheco, marketing director at Fedex, an OMD client, indicated that his media team will work through the weekend to begin deal-making on Monday. Executives at OMD did not return phone calls at press time.

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