Network Upfronts Wrap Up--TV Ad Market Not So Grim?


The Network upfront ad sales period wrapped up--the numbers are higher than expected, and the sales rushed in faster than expected.

A big surprise considering the economic downturn and the challenges and new competition network TV faces. The broadcast networks are bringing in about $9.2 billion for their primetime lineups, up slightly from last year, while analysts expected total sales to be flat to down.

Why? Advertisers are looking to save money by buying commercials ahead of time, locking in lower prices now, instead of over-paying right before they want an ad to run. So that means there's a catch: the total number of dollars may be up, but the networks have largely sold more inventory so they wont' be able to make as much money selling those last-minute ads down the line. Still, the improvement over last year is a huge upside surprise. It says a lot about how advertisers still see TV advertising as the best way to reach a mass audience.

Here's how the various networks fared: CNBC's parent network NBC was the first to finish sell out of its primetime ad inventory last week, bring in $1.9 billion in prime time advertising next season. It bought in more money than last year, but had to sell about 80 percent of its ad inventory. It seems the "NBC Experience" our parent company put together to sell ads instead of a traditional upfront presentation worked.

Then today ABC, CBS and Fox finished selling their upfront ad inventory. CBS expects to bring in some $2.45 billion for its primetime schedule and was able to increase its price to reach 1,000 views by 7 to 9 percent over last year's prices. And CBS's prices don't include ad time sold for sports. ABC is expected to bring in around $2.5 billion for its primetime schedule, about $100 million more than last year. But last year ABC sold between 77 and 82 percent of its inventory, this year it sold between 80 and 85 percent. And ABC increased its ad prices per 1,000 viewers by between 9 and 10 percent.

Meanwhile Fox is reportedly going to bring in more than its $1.9 billion total last year (remember that Fox has much less primetime programming than the other big 3 nets). Fox is reportedly charging 9 to 12 percent more for its ads, probably able to get this increase because of its younger demographic, that's always so desirable. Also, this Fall TV season, will experiment with a new strategy of cutting in half the number of commercials that run during its two most buzzed about new dramas -- an idea advertisers love.

And then there's the CW -- despite the fact that its overall ratings are down 20 percent and its ratings in the key 18-34 year old demo are down 26 percent, it benefited from the stronger ad market, performing much better than expected. The network co-owned by CBS and Time Warner sold about $375 million in prime time ads.

An upside surprise, even though that number is down about 40 percent from last year. But this year the network has 30 percent less inventory, having outsourced its Sunday programming to Media Rights Capital. Advertisers eager to reach younger viewers can't help but hope that Gossip Girl delivers ratings equal to its buzz, and that a Beverly Hills revival snags both the older generation that grew up with it and a whole new fan base.

Questions? Comments?