Despite Headwinds, Disney Expects Volume Gains In Kids’ Ad-Sales Market

Disney thinks it has made a few steps forward in its effort to lure ad dollars to its kids’ programs, despite a difficult market.

The so-called “kids’ upfront,” the market in which Viacom’s Nickelodeon, Time Warner’s Cartoon Network and other youth-skewing players attempt to land approximately $800 million in advertising for their coming season of programming, continues, but Disney expects overall volume of advance commitments for all of its properties to increase, said Rita Ferro, executive vice president of Disney Media Sales and Marketing, in an interview.

“We consciously made an effort to go for share versus pricing,” Ferro said, moving to drive volume rather than haggle over a measure known as a CPM, or the cost of reaching 1,000 viewers, which is a central element of these annual “upfront” talks between advertisers and TV networks. The company also made a strong pitch behind the idea of “co-viewing,” or an audience made up of kids and moms watching together.

Disney estimates the overall kids’ market is “down about 10%,” said Ferro. Another person familiar with negotiations estimated the overall kids “upfront” could wrap anywhere from flat to up a few percentage points.

Despite headwinds, Disney saw its volume of advance ad commitments rise about 35%, Ferro said. Advance commitments from advertisers seeking adult consumers – including retailers, mobile-phone service providers, auto manufacturers and vacation advertisers – increased 88%, she said. The company did kids “upfront” deals – which encompass everything from Disney Channel and Disney Junior to Disney XD and Radio Disney – with CPMs at about 5%, compared with deals done between 5% and 6% last year.

Because its flagship Disney Channel and emerging outlet Disney Junior focus on sponsorships and do not interrupt programs with traditional advertising, Disney is typically one of the smaller players in the kids’ marketplace, which is dominated by Viacom’s Nickelodeon and Time Warner’s Cartoon Network.

“It is premature to discuss the details of the kids’ upfront at this time, however we are very confident in our performance and leadership position in the marketplace,” Nickelodeon said in a statement. Cartoon continues to negotiate with advertisers, according a person familiar with the situation. The Hub, the network jointly owned by Hasbro and Discovery Communications, and NBCUniversal’s Sprout, also take part in the process.

Ferro cited reduced spending by toy giants including Hasbro and Mattel as one of the factors in the tepid marketplace. Cuts by makers of packaged food products, who have faced increased restrictions about the types of products they can market to children, have also tamped down spending, she said.

Disney “took a very aggressive position,” she said, offering not only traditional TV spots, but also digital and video on demand inventory as well as packages across its various media venues. Among the programming that attracted interest was “Teen Beach 2,” a sequel to “Teen Beach Movie” that is set to air on Disney Channel in 2015, and “Star Wars Rebels,” an animated prequel series to the original “Star Wars” trilogy that is set to debut with a movie on Disney Channel, in the fall before moving over to Disney XD.

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