Strong CPM Drop In Upfront
The upfront advertising market has concluded with overall tallies now possible. The Myers Report issued one today, stating that only two networks, CBS and WB, were able to increase their CPM (Cost Per Thousand) rates, with all others selling advertising at lower rates, with a 5 percent overall drop.
A $2 billion decline in total upfront revenue is also reported, compared to 2000 figures, with the accompanying decline in CPM rates "especially devastating to media sellers," company president Jack Myers says.
Myers attributes the CBS increase to its decision to sell only a limited amount of inventory in the upfront, holding much of it back for the scatter market. Myers says most advertising sellers and buyers call the strategy unwise. A CBS spokesman wouldn't respond to the charge, although he admitted the network did hold back much of its inventory. Most networks sell 80 percent in the upfront, but CBS sold only 65 percent.
Myers attributes the WB rise to its young audience. "The 18-34 demographic continues to be the most desirable, enabling the WB and MTV to outperform the market, and also allow niche networks such as Comedy Central, E!, BET and VH-1 to do well," he says.
Other winners included the emerging and growth networks such as Oxygen, Court-TV and Hallmark Channel, which had lower established costs meaning buyers could achieve their goals without lowering CPMs.
Networks with higher rates, such as CNN, Discovery and A&E were the biggest losers, according to Myers. They offered substantial price reductions and were forced to reach out to new advertisers, especially packaged goods companies.
Myers sees CPMs declining further in the scatter market due to the fading economy, which could hurt CBS. He says media buyers will maintain the new levels in 2002 and beyond and if the market continues to soften, the networks will lower their CPMs even further.
Among Myers CPM estimates are:
CBS + 1.0