Ad buyers and sellers slowly but surely were completing their upfront deals last week.
Some networks with sharply defined audiences ? such as MTV, Food Network and HGTV ? were getting agencies to pay significant increases in the cost to reach a thousand viewers (CPMs).
But several large, general entertainment networks, including Turner's TNT and TBS, A&E and Discovery, were fighting pressure to lower CPMs in return for more total dollars. Who was winning that battle depended on who you talked to.
?It's just moving very slowly,? said Dan Rank, managing director of OMD. ?People are looking for negatives. The networks are reluctant to give us negatives, understandably.?
Donna Speciale, director of national broadcast at ad buyer Mediacom, said ad buyers were holding firm and the upfront could go on for weeks.
With so many general entertainment networks looking to sell a larger proportion of their inventory in the upfront than last year, ?the buying community is basically saying ?You're all kind of the same, and the first person that makes a move may see some of the volume go their way,?? Speciale said.
If the large networks play hardball, ?some of the lower based up-and-comers, like the TNNs, FXs and Court TVs of the world who need volume, really can take a lot from them.?
Network executives bet to differ, both with buyers and with USA and Lifetime, which accepted lower CPMs in return for large orders and were nearly done with the upfront.
?I don't believe that there is any rush to drop CPMs anywhere,? said Mark Lazarus, president of sales for Turner Entertainment. ?I think the agency community is interested in creating that perception and I understand that's their job. But I think we are all surprised by the volume of business that's in the marketplace. It's more money than the agencies thought they'd have to work with even a few weeks ago.?
How much money is in the market remains a point of contention. After the larger-than-expected broadcast upfront, cable executives like Bill McGowan of Discovery Communications predicted cable would be up big as well. But others said broadcast's gain could be cable's loss, and that extra dollars moving into the upfront now represented money cable wouldn't get in scatter. Speciale pegged the upfront at $4.25 billion, compared to McGowan's estimate of $4.5 billion.
Late last week Lazarus said Turner had completed about 65% of the deals it planned to do in the upfront and that he was getting CPM increases in the low to mid-single-digit range.
While some agencies may be holding out for lower CPMs, they might ?not get the exact programming that they are interested in,? Lazarus said.
Some money from the bigger networks could go to Court TV. EVP-advertising sales Charlie Collier said he's seeing bigger budgets and that agencies are willing to spend even more if the network is creative or prices aggressively. His early deals have called for low single-digit CPM increases, he said.
Some networks were seeing significant increases. MTV, with its young viewership, was seeking a CPM increase of 8% to 9% and making deals, said Mediacom's Speciale. ?Movie money wants them because of The Osbournes,? she said. Comedy Central also has a young audience and could benefit, she added.
With networks that draw very targeted audiences, Scripps Networks SVP-ad sales Steve Gigliotti said budgets have doubled from clients who bought commercials last year, and there is additional business from new clients.
Scripps networks HGTV and Food Network are among the top with viewers with incomes greater than $75,000 a year, he said. ?That target has made us a pretty in-demand network,? he said. That, and the fact that Scripps limits its advertising inventory to ten minutes per hour.
Gigliotti said a few deals have closed with CPM increases in the high single-digit to double-digit range. But he noted, ?not enough business has closed. Some of the bigger, tougher agencies are still out there.?
Also reporting some dealmaking was Rainbow's MuchMusic, which showed a significant increase in CPMs, according to Arlene Manos, president, national advertising sales for Rainbow Advertising Sales.
Manos also said WE: Women's Entertainment is getting a lot of interest now that its exclusive advertising arrangement with Johnson & Johnson has expired.
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