Upfront 2015: Kids’ TV Ad Market Has Started To Move

Madison Avenue is moving more quickly than anticipated to ensure pitches for electronic toys and holiday movies get put in front of the consumers most likely to be interested in them – kids and teens.

The so-called “kids’ upfront,” when TV networks try to sell approximately $800 million in TV advertising for programming aimed at children and pre-teens, has begun to move in more robust fashion than might have been anticipated this year, according to ad buying executives and other people familiar with the tone of negotiations.

“The kids’ upfront is healthier than many people had expected,” said Jeff Lucas, who oversees all ad sales for Viacom, owner of Nickelodeon, in a brief interview. He declined to comment on how much inventory had been sold or the terms around any sales. Time Warner’s Cartoon Network and Boomerang have moved “significant” inventory, according to a person familiar with the situation.

Buyers caution activity surrounding this particular segment of the TV industry’s annual “upfront” market  – when U.S. TV networks try to sell the bulk of their ad inventory for the coming season – should not be taken as a sign the rest  of the market will move in similar fashion. TV advertising has come under more pressure in recent years as new technology makes streaming video available on laptop computers and mobile devices. The volume of advance ad commitments fell at both cable and broadcast in 2014’s negotiations.

Indeed, these buyers suggested the kids’ market is being driven by the threat of fewer availabilities at Nickelodeon. Viacom has several multi-year deals in place with advertisers, these buyers said, and is also contending with ratings declines at the kid-media giant. This creates a feeling of scarcity, one buyer said, especially for those advertisers who want commercials to run during fourth quarter, when kids and parents are thinking about gift giving. Cartoon Network, on the other hand, has been talking to advertisers about ratings growth among boys between the ages of 6 and 11 as well as female viewers between 6 and 11.

The fourth quarter is also expected to feature a number of much-anticipated movie releases, including Walt Disney’s next iteration of “Star Wars.” Ad-sales executives have also said they anticipate better-than-usual demand from toy-makers, who are ready to unveil the latest in gadgets and playthings that are connected to the Internet and can interact with kids in new ways.

No single genre of TV may be under scrutiny as that aimed at young viewers. A March 2014 study from Deloitte found teens and people in their 20s spent more time watching TV shows and movies on new screens — computers, tablets, smartphones — than they did a TV set. Younger viewers are presumed to be quickly embracing technology that lets them view their favorite characters “on demand” in a car seat, at a restaurant or even at home. Much of that viewing is, at present, not counted by Nielsen in the calculations that drive ad sales.

Volume of ad commitments in the 2014 kids market was estimated to be down in the low to mid single-digit percentage range, and some of the networks involved were believed to have accepted a lower rate of increase in the cost of reaching 1,000 viewers, a common measure in these talks also known as a CPM, in order to drive sales. Exact terms of CPM rates at play in the current kids’ market could not be immediately learned.

Viacom, which recently put all of its ad sales efforts under the aegis of Lucas, has been trying to use the kids’ market to get advertisers to commit to its other networks, like MTV and Comedy Central, according to buyers. The general upfront, however, is likely to proceed more slowly, buyers said.

“Whatever is happening in kids will not be indicative of the rest of the market, where volume will be very challenged,” said one ad buyer.

Executives on both sides of those broader negotiations said advertisers continue to register budgets, and noted talks between ad buyers and cable and broadcast networks have not progressed significantly as of yet.  A number of big-spending advertisers – including General Mills, Coca-Cola, L’Oreal, Unilever and Johnson & Johnson – have announced reviews of their media-spending operations, a development that threatens to slow down an “upfront” process that has in recent years grown more complex.

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