CEO Dauman questions ratings drop at Nickelodeon

Viacom CEO Philippe Dauman implied Monday that a fluctuation in Nielsen sample households might be behind a sharp ratings deterioration at Nickelodeon this fall but he admitted that there’s no clarity on the drop which threw Wall Street for a loop last month.

Still, Dauman wowed investors on the opening day of the three-day UBS Global Media and Communications confab in Gotham with news that the company plans to spend a whopping $20 billion returning cash to shareholders in the form of stock buybacks and dividend payouts over the next five years, accelerating an already hefty repurchase program. Asked if tying up so much cash could preclude major acquisitions, Dauman said Viacom’s focused on growing “organically,” beefing up international, film and TV content and its nascent film animation biz.

He stressed that the combo of a new stream of animated pics plus Nickeleon’s iconic TV fare will give the company significant added muscle in consumer products, where Nickelodeon already has a big footprint.

At this moment, however the kid’s network, which went into a ratings tailspin just ahead of the crucial holiday season, is clearly causing him some grief.

“Nielsen is the only game in town for now so we have to live with it,” Dauman said during his luncheon keynote presentation. “We have seen anomalies in the past. Never to this extent.”

Dauman revealed on Nov. 10 while discussing quarterly earnings that the generally steady kids’ cable network saw a highly unusual 15%-20% ratings drop in mid-September. The company said then it was working with the ratings agency, and analyzing independent set-top box data. The net is also adding a spate of new animated and live-action programming.

Investors remain baffled. “We don’t know what’s going on yet. We’ll know next quarter” when the company announces a new set of financial results, said one attendee.

Earlier in the conference, a trio of forecasters predicted that global advertising growth this year would prove resilient, although lagging earlier estimates.

Zenith Optimedia’s head of worldwide Steve King sees advertising rising 4.7% in 2012 after growing 3.5% this year amid the economic uncertainty convulsing Europe, the natural and nuclear disasters that hit Japan and the Arab spring that has rocked Egypt and other key territories.

The numbers fall shy of Zenith’s previous estimates of, respectively 5.3% and 3.6% for 2012 and 2011. Spending next year, while still weighed down by the Euro-zone crisis, will see a pop from the Olympic games in London and, Stateside, from the presidential campaign, King said.

MagnaGlobal, the media unit of Interpublic Group, said Latin America posted the strongest gains this year – up over 13% — followed closely by Central and Eastern Europe. Western Europe sales rose a meager 1.6%. North America grew 3.1%.

The strongest growth rates came from Argentina — up 38%. The lowest from beleaguered Greece — down 19.3%.

On the digital side, according to GroupM, a unit of WPP, digital media investment will make up 43% of the global ad dollar growth in 2012. Digital ad spending is expected to reach nearly $85 billion this year, a 16% jump over 2010, and rise to $98 billion in 2012.

GroupM sees digital comprising 22% percent of all measured ad investment in mature western economies in 2012, and 12% percent in the faster-growing world. “The predicted respective digital growth rates in 2012 are 11% and 37%, so the faster-growing world is catching up fast,” said GroupM Futures director Adam Smith at UBS.

Global ad spending on paid inventory in social media is likely to be around $5 billion in 2011, or about 6% of measured online ad investment. Smith said this is probably the largest single growth component in paid-for digital today, on a trajectory, which could double to $10 billion within two years.

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