Entertainment-fueled: Kids' upfront soars as prices rise 15% to 20%
The kids' upfront market is off to a bullish start, with ad prices soaring 15% to 20% and more over a year ago.
The chief reason for the rise in prices is skyrocketing advertising demand in the entertainment categories, including kid-targeted DVD and video sales, electronics and video games. Those categories typically pay higher ad rates than other categories because they change media schedules almost daily and kids' TV programmers charge higher prices for such flexibility.
Nickelodeon, the Cartoon Network and other networks have been grabbing these hefty price increases, according to media executives. Overall, kids' advertising revenue has grown 5% to 10% over the $750 million in national kids TV advertising of a year ago, according to media-buying executives.
"We are more than half done, and we are seeing very strong double-digit pricing increases," Mel Karmazin, president-chief operating officer of Viacom, said of Nickelodeon's kids upfront market last week. Mr. Karmazin said strong business is coming from toys, movies, package-goods and consumer-electronics companies. Nickelodeon, following its typical sales strategy, has struck multiyear deals with "a number of advertisers," Mr. Karmazin said.
David Levy, president-entertainment sales and marketing, Turner Broadcasting Sales, said it is "a very strong marketplace" and that Cartoon Network is getting "double-digit CPM increases."
Media estimates are that 50% to 70% of kids' TV programming inventory already has been sold. Last year, according to TNS Media Intelligence/ CMR, Nickelodeon pulled in $844.1 million in advertising revenue and the Cartoon Network grabbed $231.9 million.
Traditional kids' advertisers-toy companies and food companies-haven't increased spending that much this upfront, according to media agency executives. Food companies have been increasingly concerned about overtures by federal agencies and Congress that kids' TV food advertising should be regulated.
The kids' upfront market, which started two weeks ago, is moving faster than in previous years. Last year, for instance, the market started in May and was completed in August. Media agency executives said this kids' upfront market should take another two weeks to complete.
So strong is the market, some media agency executives said, that networks are inking even better cost-per-thousand-viewer increases in prime kids' selling periods.
Messrs. Friedman and Lafayette are reporters at TelevisionWeek. The publication's Jay Sherman also contributed to this report.