Never mind Ruben and Clay. Madison Avenue agencies are voting, with a record amount of client dollars, for their own American idol: broadcast network television.
The agencies, on behalf of the marketers they represent, are agreeing to spend more than $9 billion to buy commercial time on the broadcast networks ahead of the 2003-4 prime-time season. Last spring, agencies committed $8.1 billion. The bargaining process, known as the upfront market, was more frenetic than usual and wound up a "runaway sellers' market," in the words of one tired participant.
"It's like being back in college and pulling those all-nighters," said another participant, Mike Shaw, president for sales and marketing at the ABC Television division of ABC.
The strength of the upfront market for broadcast television is reflected in many deals being made at rates 15 to 23 percent higher than those last spring, in what is known as cost per thousand viewers. That strength is already being mirrored in the negotiations to buy commercial time on cable networks; those negotiations typically begin after the broadcasters complete their sales.
As the demand for television goes, usually, so goes the general advertising economy. That the broadcast upfront moved so fast, at prices higher than had been forecast even a couple of weeks ago, could prefigure an improved climate for agencies, media companies and advertisers after one of the most daunting periods for them in decades.
"There's an expectation of a more robust economy in '04, and people wanted to get their money down," said Jon Nesvig, president for sales at Fox Broadcasting, part of the News Corporation.
"We all knew it was going to be big," he added. "It just turned out to be bigger than we'd thought."
The dickering began in earnest Tuesday evening and proceeded almost nonstop through yesterday morning, pausing only for meal breaks heavy on fare from the greasy-food menu of Midtown Manhattan - barbecue, pizza and Chinese takeout most prominently - and for huddling in conference rooms Wednesday night to watch the "American Idol" finale on Fox.
"That had to help us with a lot of the 20-somethings" at the agencies, Mr. Nesvig said, laughing. "We said, `Hey, you want to be there next year?' " The reference was to the next edition of "Idol," which begins in January.
"There were several people at the agencies who spent the night on the sofa," said Karen Soots, national media manager for one big advertiser involved in the upfront bazaar, the Red Lobster division of Darden Restaurants.
Restaurants, particularly fast-food chains, were among the marketers agreeing to make commitments, subject to change after the fall season gets under way, to spend more in 2003-4 than they did in 2002-3. Other categories that Mr. Nesvig and executives at other networks identified as fueling the increased demand for commercial time included beverages, especially soft drinks; entertainment, for theatrical films and films on DVD's; pharmaceuticals, for prescription drugs sold directly to consumers; packaged goods; retailing; and telecommunications.
Automobiles, a source of heavy spending in previous upfront markets, was described as flat to down slightly.
Mostly, though, the gains were "across the board," said Leslie Moonves, chairman and chief executive at CBS, part of Viacom. "I have no bad news here." CBS and its smaller sibling, UPN, are somewhat behind the pace of the other broadcasters, and are expected to complete their deals by today.
NBC, owned by General Electric, led the broadcast parade with estimated sales of $3 billion, compared with about $2.7 billion last spring. That would be the first time a network reached $3 billion in an upfront market. NBC's sales include some spots packaged as part of purchases of time during the 2004 Summer Olympics.
"When exciting shows come to the broadcast networks, they aggregate huge audiences," said Randy Falco, group president for the NBC Television Network division of NBC, "and if you want to sell product, you have to reach huge audiences."
CBS was second again, as it was last spring, selling an estimated $2.2 billion worth of spots, compared with $1.9 billion. Mr. Moonves said demand was robust for returning series like "C.S.I.: Miami" as well as new series like "Two and a Half Men," a sitcom with Charlie Sheen and Jon Cryer, and "Cold Case," a drama about an investigator of unsolved murders that he described jocularly as "Jessica Fletcher meets `C.S.I.' "
ABC, part of Walt Disney, eked out a gain from last spring, according to estimates, selling $1.65 billion to $1.7 billion, compared with $1.5 billion. ABC has struggled to regain momentum after many reality series the network scheduled for 2002-3 fell short in the ratings.
"We've gotten the message out that we're going heavier with comedies" and other scripted programs for 2003-4, Mr. Shaw said, "and that resonated."
"I think people are betting there's a little upside here," he added.
ABC's total does not reflect sales of commercial time for "Monday Night Football" and other prime-time sports coverage, handled separately from the upfront.
Fox, basking in the success of reality fare like "American Idol" and "Joe Millionaire," along with scripted series like "24" and "That 70's Show," sold an estimated $1.6 billion, perhaps even a tad higher, compared with $1.3 billion last spring.
"Our schedule was well received," Mr. Nesvig said, "and what helped us gain in volume was that it's a more balanced schedule, with more shows for female viewers, which helped draw more packaged goods."
One such new series is "The O.C.," a serialized drama with a young, attractive cast that, Mr. Nesvig said, "puts us back in the `Melrose Place'-type business that advertisers would like us to be in."
Another strong performance was turned in by WB, owned by AOL Time Warner and the Tribune Company. WB sold an estimated $700 million to $750 million, compared with $575 million last spring. During presentations of its 2003-4 schedule last week, WB executives stressed the preponderance of scripted series they planned, and that paid off, said Jed Petrick, president and chief operating officer at WB. The increases in cost per thousand viewers, upward of 20 percent, are the highest for any of the six networks.
"Advertising is an investment, not an expense," Mr. Petrick said, and marketers are reluctant to invest in "objectionable material" like unsavory reality shows. New scripted series that appealed to buyers included the sitcom "Like Family," the variety-comedy show "Steve Harvey's Big Time" and the romantic drama "Tarzan and Jane," he added, along with returning favorites like "Charmed," "Everwood," "Gilmore Girls" and "7th Heaven."
Finally, UPN, as noted, is not finished, so estimates for its sales are less precise than for other networks, ranging from $250 million to $275 million. Last spring's tally was about $225 million.
All six networks have sold or are selling in the upfront market about the same percentage of available commercial time, estimated at 80 to 85 percent. The remaining time will be sold during the 2003-4 season in what is known as the scatter market.
Posted on aef.com: May 28, 2003
Stuart Elliott, The New York Times. May 23, 2003
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