Gains small for ABC ads

Single-digit increases sign of tough upfront

In a sign of weak demand, ABC is settling for 3%-4% rate increases as it books ad commitments for the upcoming TV season.

Among the broadcast nets, the Alphabet held the strongest cards going into the annual upfront negotiations with hits including “Desperate Housewives” and “Grey’s Anatomy.”

The net chose to hold out for more than a month before writing significant business in a bid to maximize rate increases in a market expected to be flat to down slightly.

But the low-single-digit increases are a sign of a much tougher upfront for the networks than last year, when ABC won rate increases of between 4% and 6%.

Still, analysts said any increase for the nets is good news in a soft market and as advertising dollars are increasingly chasing digital opportunities.

“This is not bad news for the broadcast nets; it’s bad news when everybody is down,” said Jack Myers, editor of Jack Myers Media Business Report, who predicted the nets would see 2% rate increases on average.

Sensing the weak market, Fox, NBC and CBS broke ranks with ABC and attempted to gain market share by booking deals at lower rates.

The strategy seems to have paid off. Fox has nearly completed its upfront sales with rate increases of 2%-3% depending on the amount of money spent with the network. CBS is also booking increases of 2%-3%.

Despite another fourth-place finish in the ratings, NBC has sold significant inventory by accepting price drops of 4%-5%. Net is selling more volume and is expected to match its 2005 take of $1.9 billion.

With an arsenal of hits and growing ratings in the 18-49 demo, ABC came into the upfront with significant leverage with advertisers.

Because it continues to have some of the lowest ad rates, the net was in the best position to get the healthiest increases, setting a “ceiling” that could serve as a benchmark for deals at other networks.

The upfront got off to a slow start because ABC went into the talks demanding that advertisers recognize viewers that record shows and watch them later on DVRs.

Rather than wait for ABC to set a ceiling on increases, Fox, CBS and NBC made a bet that ABC’s increases would be low and jumped into the market with rates they knew Madison Avenue would quickly accept.

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