• by Wayne Friedman , David Goetzl  @dgoetzl, March 10, 2006

Nickelodeon's top sales executive Thursday told reporters that pressure on food marketers to curb junk food advertising won't lead to a spending decrease in this spring's kids' upfront marketplace.

Jim Perry, senior vice president of Nickelodeon integrated advertising sales, said food marketers are redirecting their marketing outlays to support healthier products, rather than cutting spending.

"All the food companies that we work with are in the midst of reformulating their products or developing new healthy products--that's what they are communicating and marketing to our audience," he said in a conference call following Nick's upfront presentation yesterday. "So it's not affecting how much they're bringing to the upfront market; it's affecting the types of products and the way they're communicating their messages."

Pressure on food marketers has ratcheted up over the last year as studies suggesting junk food marketing contributes to childhood obesity have proliferated. Interest groups are taking action, most notably the Center for Science in the Public Interest which has threatened a lawsuit against Nickelodeon and Kellogg seeking to limit their advertising of sweets to young children.

Cyma Zarghami, president of Nickelodeon Television and head of MTVN Kids and Family Group, said the company takes the issue very seriously and is in the midst of a $30 million effort to fight childhood obesity. "Our commitment to health and wellness is stronger than ever," she said.

How food marketers respond with their dollars to the increased scrutiny is perhaps the single biggest wild card in the coming $800 million kids' upfront market. Others include continued slowdowns in the toy business, and marketers' interest in shifting spending away from television to other emerging platforms that may offer better ROI metrics.

Nickelodeon has also experienced some bumps with season-to-date ratings down 6 percent for the 2-to-11 demo in total day, according to Nielsen Media Research. In the conference call, Perry did point out that Nickelodeon has the top 70 programs in that demo this season.

Perry characterized the coming upfront as "pretty strong" and said Nick has completed a third of its business due to multi-year deals. But prominent kids' buyer Shelly Hirsch said he expects CPMs to be flat and demand to be lackluster except for the pre-Christmas period. "As always you'll have those six or eight weeks in November and December that are going to be healthy," said Hirsch, former CEO of Summit Media Group now with Beacon Media. "It's the rest of the year that is always a concern."

Nickelodeon's Perry said he is encouraged by bright spots in the toy industry such as MGA Entertainment's Bratz dolls, which are challenging Barbie, and the popularity of products from Jakks Pacific, which markets Plug It In & Play TV Games. "The toy business is really being lifted by the growth in Bratz from MGA along with some other strong mid-tier players like Jakks," he said.

Perry also suggested the theatrical and DVD market could be strong during the holiday season (Paramount's "Charlotte's Web" is scheduled for a Dec. 20 release). And he trumpeted Nickelodeon's expansion into non-traditional kids' categories with marketers of autos (Chevy and Kia), travel (Bahamas and the Cayman Islands) and consumer electronics (Microsoft, Dell, Kodak and HP) looking to reach families through children's programming.

Hirsch said that networks such as Nickelodeon will need to derive bigger shares from electronics marketers since kids are growing up faster and eschewing toys at earlier ages in favor of iPods and other devices. "Kids are getting older younger," he said. "They'll buy products, but not toys."

As for marketers' interest in using new media, Nickelodeon executives said they're more than ready to offer those opportunities with content on 15 different platforms, including broadband channel TurboNick, NickJr.com, VOD, wireless and online games. Nick has restructured its sales department to place executives handling multiple platforms in a single group.

"We are in a digital era for kids and our mission obviously is to keep up with kids, so we want to put our great content on all the platforms that they're looking for," Zarghami said. "And we don't want to just put the television content on multiple platforms, we want to create content that is unique and exclusive and appropriate for each one of those platforms."

On the programming front, Nick continues to expand its appeal to multicultural audiences, announcing it would launch "Downward Doghouse," an animated series on Nick Jr. focusing on Chinese culture and language through a five-year-old Chinese-American girl named Kai-lan.