Driving The Upfront: Selling Begins For Movie, Auto Companies
Movie and auto companies sprang into upfront action for the 2012-2013 season at two networks: Fox and ABC. Price hikes were expected in the mid- to high-single-digit percentage gains for program deals. But little other activity has started -- as of Thursday mid-day.
Movie and automobiles typically start up the upfront process -- categories that pay slightly higher than marketplace prices to secure specific inventory and flexibility on the networks.
Other advertisers are still on the sidelines. One media agency executive says the networks were not necessarily pushing for specific budgets yet for other ad categories. “Nothing much is moving. No one has pressured us for budgets. Other than that, things are quiet.”
Fox and ABC similarly moved first during last year’s upfront. Another media agency executive said NFL negotiations for inventory are also active.
Media-buying executives believe all this is somewhat of a good sign for marketers. If movie companies and autos are paying around mid-single to high-single-digit price increases, it would mean -– in theory -- smaller hikes for other consumer product advertisers. “It’s all good,” said another media agency executive.
CPM price gains of 4% to 8% would be much lower than the 12% to 15% and more price hikes levied on advertisers a year ago.
Recently, CBS has said if it doesn’t get “premium pricing,” it would hold back inventory and look to sell it in the scatter market. Les Moonves, president and CEO of CBS, had said the network deserves to ink 10% or more price gains for next season’s upfront inventory.
Industry estimates are that the five English-language broadcast networks could see around 2% to 3% more overall money during the upfront process this year, totaling around $9.5 billion. Networks usually sell around 75% of their seasonal inventory to major TV advertisers during the upfront selling period.
A Fox spokeswoman declined comment; an ABC representative did not respond to inquiries by press time.