Upfront learns its ABCs to the tune of $8.3 bil

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The upfront market soared to $8.3 billion in prime-time advertising sales last week, surpassing even the most aggressive projections by at least $600 million.

And nearly one-eighth of the total -- a record $1.4 billion -- is being raked in by a single show, ABC's "Who Wants to Be a Millionaire."

Overwhelming demand for juggernaut "Millionaire" (see story at right) made ABC the big winner in the upfront and contributed to a 14% increase from last year's $7 billion.

"It's the upside of optimistic," said Jon Nesvig, president of ad-vertising sales for Fox Broadcasting Co.


ABC posted more than $2.3 billion in sales, $600 million more than last year's upfront, according to several agency and network advertising executives. Just behind was NBC, which wrote $2.25 billion in business, up about $100 million from last year. CBS came in third at $1.7 billion, a $200 million improvement.

Fox was next at $1.3 billion, $200 million higher, while the WB was flat at about $450 million. United Paramount Network grabbed $175 million, $30 million more than a year ago.

Media buyers and sellers had underestimated the strength of the market.

"We were predicting $7.6 billion," said Tim Spengler, exec VP-director of national broadcast for Initiative Media North America, Los Angeles.

"Demand was greater than expected," echoed a veteran executive at a leading ad agency.

Major categories -- automotive, financial, pharmaceutical and retail -- posted budget increases of 20% to 30% on average. J.C. Penney Co., Best Buy Co. and Wal-Mart Stores, for example, raised upfront TV budgets by an average of 30%.

Package-goods advertisers also brought good news to the market. Media executives had expected to see a steep drop in the category, but it never materialized. "The one thing that surprised me is that we didn't see any package-goods attrition," said Mr. Nesvig.

It was speculated, for instance, that Procter & Gamble Co. would cut its TV budget by 18%. Instead, package-goods budgets overall were flat to slightly up over last year, media executives said.


Some categories were soft, including telecommunications companies that, according to some estimates, fell by about $200 million -- attributed chiefly to lower spending by MCI WorldCom. Movie companies came in with single-digit percentage increases.

The wild card in the upfront had been dot-com advertisers. Network executives couldn't determine whether they would continue to spend wildly as they had in the current broadcast season. But since the March stock slide, dot-coms have pulled back from their free-spending ways (see story on Page 66) and "they were never a factor" in the upfront, said one veteran ad executive.

ABC also led the way in cost-per-thousand increases, up 17% to 20% from last year's programming. CBS and NBC inked deals at 16% to 17% CPM increases, while Fox raked in 15% to 17% hikes.

Even though ratings fell at the WB, the network still grabbed huge 25% to 27% CPM increases because of demand for its elusive young audience.

"We are pretty unique and fill a difficult niche for customers," said Jed Petrick, senior VP-advertising sales for the WB.


The big six networks peddled less inventory during this upfront than in previous years, selling off 75% to 80% of their overall inventory supplies, down from the 80% to 85% levels of a year ago. Retaining extra commercial time means network executives anticipate strong demand in the scatter market, when advertisers pay higher prices.

In fact, sales were so bullish that many networks turned away business.

"There was $100 million that we couldn't handle," said Mr. Petrick. "We pushed a lot of money back."

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