Marketing

Upfront May Pump Up Volume

6/20/2011 12:01 AM Eastern

Chicago — After a strong broadcast upfront, the cable
market is booming, particularly when it comes to volume.

Market sources estimate that the cable portion of the
ad-sales upfron auction will
be at least 15% higher than last
year, bringing the total volume
of advertising commitments
to $9.4 billion, a record that
would also eclipse the size of
the broadcast total for the first
time. Some large cable groups
had volume increases in the
range of 20% to 25%.

Prices increases vary from
network to network, but ranged
from high single-digit gains
on a cost-per-thousand viewers
(CPM) basis, or just below
the lowest broadcast hikes, to
increases in the high teens, on
par with the best the broadcasters
could manage.

Cable sales executives said
the amount of money they
were getting from agencies increased
as the week went on,
strengthening the market as
it went along. They said they
thought some of the added
money might have come from
broadcast, where the networks
were aggressive about getting
price increases in the doubledigit
range. Th ere was also money shifting among the cable
groups as some insisted on robust increases in their
rates.

The big groups also attempted to move advertisers from
their biggest networks to ones that are still emerging. It is
easier for buyers to swallow big increases on smaller networks
because their CPMs are usually still lower than the
bigger channels, lowering their average cost per viewer.

Turner Broadcasting moved early, doing deals with most
of the major agencies at 12% to 13%. In addition to getting
increases, Turner managed to raise prices for its reality
channel truTV to levels similar to those for its more established
TNT and TBS, sources said.

Similarly, NBCUniversal’s
cable group, which now includes
networks that were part
of Comcast before Comcast acquired
a 51% interest in NBCU
in January, was diverting money
advertisers with low base
rates were looking to spend
on USA Network, buyers said.
NBCU often was able to steer
that money to other channels
in its portfolio. That would
help USA raise its average CPM
while helping the entire group
meet its revenue goals.

Discovery Networks was
looking to funnel the high volume
it was seeing into Investigation
Discovery, which has
seen a huge increase in viewership
since the last upfront.
Sponsors were also being encouraged
to put money into
Science, Military Channel and
the new Velocity.

The high volume may also
help A&E Networks, which has
a big win in History and a turnaround
situation in Lifetime that
are balancing each other out.

Buyers said that some MTV Networks channels — such
as VH1 and Spike — were getting rates on the low end of
the range, while its Comedy Central was achieving doubledigit
gains. MTV’s rates were hampered because spending
by clients looking to reach younger viewers did not appear
to be rising as fast as other categories.