Kiddie Cablers Doing Just Fine With New Diet

Nick, Cartoon Network Have No Trouble Filling Ad Void Left by Sugary Snacks

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NEW YORK ( -- Sensational media coverage surrounding childhood obesity has vaulted kids' advertising up to a top spot on the public-enemy list in the past two years, so you might think the kids' upfront would be a dismal affair these days. Instead, aided by diversification into a range of nonfood categories, the kiddie cablers are enjoying another strong year.
Jim Perry
Jim Perry

Merrill Lynch pegged the 2007 kids' upfront to finish about 5% higher than last year's total haul of $950 million. And as the ink dries on what Nickelodeon, Cartoon Network and others are reporting to be an even stronger market for children 2 to 11, it's clear the dollar increase isn't coming from food companies.

Even before this year's Federal Communications Commission controversy concerning children's ad messaging caused marketers such as Kellogg and General Mills to pull back overall spend on their sugary cereals and snacks, the kids' networks were bracing themselves for a changing market.

Marketing nutritious foods
Nickelodeon sales chief Jim Perry told Ad Age in June that he's been partnering with the controversial marketers since 2004 to market nutritious foods. Characters such as SpongeBob SquarePants and Dora the Explorer recently began appearing on bags of green vegetables from General Mills. "One could read [what's going on] as 'the sky is falling' within the world of the kids' marketplace," Mr. Perry said. "We take the issue very seriously, but some remarks that the business is collapsing are humorous to us because we've been working partners around the obesity, health and wellness issue for the last two-and-a-half to three years."

Though cereal money still accounts for a significant chunk of Nick's change—about $94.4 million was spent on Nickelodeon in 2006 alone, according to TNS Media Intelligence -- the network also has been turning to less-traditional categories such as automotive, travel and financial in recent years. In one upfront deal with Starcom alone, valued at $100 million and based on minute-by-minute ratings, the network locked in dollars from a list that included Kellogg as well as nonfood clients such as Lego, Nintendo, Chuck E. Cheese and Buena Vista.
Jim Tricarico
Jim Tricarico Credit: Nickelodeon

Jim Tricarico, Mr. Perry's No. 2, attributed the network's ability to earn more dollars with less support from the bread and butter of its industry to the ratings growth and mass reach Nick has acquired since 1997. The network has ruled the crucial Saturday-morning daypart for a full decade now, often posting four times the ratings of the broadcast networks. "Ultimately people wanted to land their dollars in the safest place for their money, and our ratings were consistent year after year,"Mr. Tricarico said. "Everyone viewed the marketplace as flattish to up a tick, and we certainly saw a much better upfront than that at the hands of money shifting from some of the broadcast networks and some of our cable competitors."

Increased spending from other categories
Nick's main challenger, Turner's Cartoon Network, also has had no trouble putting other brands where sugar and salt used to be. David Levy, president of Turner entertainment ad sales and marketing, told Ad Age in July he expected the network to finish this year's upfront with increased revenue and CPMs, despite all the cutbacks from General Mills and Kellogg. "Their dollars are down for Cartoon, but their overall dollars were up,"he said of the Turner entertainment suite, which also includes TBS, TNT and Court TV. He said increased spending from categories such as movies and gaming will help the network break even this year.

For major media buyers in the space, such as David Tepper, who buys kids' media for his client Hasbro at WPP Group's MediaCom, cable has become an increasingly attractive place to put dollars despite the easy reach broadcast TV provides. "[Broadcast] used to be a major player; now it's a minor player,"said Mr. Tepper, MediaCom's supervisor for national broadcast. Having Disney programming on ABC has been a big coup, Mr. Tepper said, because "you get those girls that don't have the Disney Channel on cable, and with 'High School Musical 2' coming out, Disney's so hot right now."
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