NEW YORK — Consolidation among kids advertisers and increased kids ad inventory in the market have given media buyers an edge in negotiations going into this year’s kids upfront.
The confidence buyers feel is manifesting itself in the lateness of this year’s kids upfront. In the last few years, the market has moved right after the Super Bowl in late January. This year, major money won’t begin flowing until April, buyers say.
Recent consolidation among toy manufacturers has left few players remaining in the market. As a result, network sellers have less leverage. Just a few years ago, a kids network salesperson could threaten a waffling toy manufacturer with being completely locked out of the network. With less than handful of major toy companies left, the threat of being shut out is far less likely.
Also, the Family Channel’s conversion in August into kids network Fox Family Channel brings another full-time kids player into the marketplace. Fox Family’s entrance is providing buyers with tons of additional kids inventory and another network to play off the others in negotiations.
“People’s budgets change constantly,” said Jon Mandel, senior VP for Grey Advertising, and one of the biggest kids buyers. “And who knows about the cereal business because of El Nino. Is there going to be enough wheat? Is there going to be enough grain?”
Several kids ad executives said that Mandel, who buys for kid heavyweights Hasbro toys and Kraft General Foods cereals, is himself one of the main factors holding up the upfront.
“Some people feel that they don’t have the marketplace intelligence of Jon Mandel, so they’re waiting for him to establish the marketplace and follow on his coattails,” one marketplace exec says.
Big bucks in waiting
While the lion’s share of upfront money remains to be spent, some pockets of business have taken place.
“We’ve done business with both new and returning advertisers,” said Jed Petrick, senior VP of ad sales for the WB. “People see us as having the most upside.”
Kids leader Nickelodeon is largely sitting out this year’s upfront. The Viacom-owned network successfully sold advertisers on two-year deals last year, so most kids advertisers have already spent 30% to 50% of their budgets on the “Rugrats” network.
However, Nick is not totally idle during the upfront. The network is trying to convince advertisers to add another year onto their two-year deals. Also, Nick is adding an additional half-hour each night in primetime, which sells at top rates.
Buyers said that the WB will likely snare cost-per-thousand (CPM) increases this year, but Fox Children’s Network and ABC may not be so lucky. Cartoon Network is still growing rapidly, so the Turner network probably won’t have to accept CPM decreases.
Small buyers wait, too
One kids ad exec said he was puzzled about why some of the small kids advertisers haven’t moved into the market to beat big buyers like Mandel and John Muszynski, executive VP of Leo Burnett’s Starcom unit, to the punch.
“I’m surprised that more little players haven’t jumped in and taken advantage of the stall,” he said.