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Ad $s on the rise in kids TV market

Increased demand from top advertisers, coupled with a dwindling supply of rating points, is driving up prices and leading to what media buyers and sellers say could be a $700-plus million kids' upfront this year.

With nearly half of negotiations complete for commercial time in the coming season, ad spending is on pace to go up around 10 percent over last year, with Nickelodeon and Cartoon Network building on their collective two-thirds share of the market.

Media buyers say the biggest advertisers are finishing up deals and in some cases are paying as much as 20 percent more than last year for spots on top networks in key advertising periods, like the "hard-eight" weeks leading up to Christmas, the Easter season and, to a lesser degree, the back-to-school season in late summer.

"Pricing is definitely up, and in certain parts of the market pricing is up in double digits," says Kim McQuilken, executive vice president of Cartoon Network sales and marketing, who also will handle ad sales for the Kids' WB starting in September.

"I think first and foremost the key targeted advertisers of packaged goods and toys are very active and up. I can't tell you by how much, but the majority of our upfront conversations were with those two categories."

John Wagner, chief kids' negotiator at Starcom, agrees.

"Packaged goods is really driving this market," he says. "The money is trending up, and it's 52-week money.

"What you have after that [and toys] are the quick-service restaurants, which are stagnant, and then you have videos and movies, but I don't think there are as many things in the pipeline this year."

If the kids' upfront finishes up around 10 percent, it will be comparable to forecasters' projections for this summer's national television upfronts, which are expected to go up 10 percent, on average, to $16.3 billion.

Cable TV is expected to have the biggest increase at 16 percent, syndication should see a 10 percent increase, and spending on the broadcast networks should be up about 7 percent.

Like the broadcast networks, kids' television is benefiting from increased advertiser demand and fewer available rating points. Together that is driving up the value of available spots, especially for top networks in critical advertising periods.

The number of available weekly rating points for kids fell 6 percent on the broadcast networks this year, according to Turner Entertainment Research, and 8.5 percent on the cable networks.

Nickelodeon and Cartoon Network account for 83 percent of available rating points, but both had audience declines in first quarter this year. Nickelodeon's average kids 2-11 audience fell 2 percent in first quarter, compared to the same time last year, while Cartoon Networks' fell 17 percent.

Moreover, UPN is no longer in the kids market, and weekly rating points earlier this year were down for all the broadcast networks, except the Kids' WB.

Ad spending on the broadcast networks, as a result, has been on the decline.

The Broadcast Cable Financial Management Association reported yesterday that ad spending in the kids' daypart fell 28 percent on the Big Three networks in first quarter, compared to the same time last year.

Kids' was the only daypart, in fact, to post a year-to-year decline outside of sports, which suffered a sharp decline from last year when NBC had the Olympics.

"Compared to last year, this year there seems to be more urgency," says McQuilken.

"I think with a couple of the players getting out of the business and some of the players being down in ratings, gross rating points are down in some cases."

Posted on aef.com: May 19, 2003


Kevin Downey, Media Life Magazine. May 8, 2003

Copyright © 2003 Media Life. All rights reserved.