• by Wayne Friedman , June 27, 2005

In no hurry to do upfront deals, General Motors only last week registered budgets with cable networks, say media buying executives. While this timing doesn't help a weak cable upfront marketplace, media executives say GM's cable upfront activity is par for the course. The car giant typically doesn't spend much on general-interest entertainment cable network deals, as most of its marketing budget goes into TV sports programming--and to a lesser extent, news programming.

Recently, GM moved its media buying operations to Starcom MediaVest Group from The Interpublic Group. But media executives say this change had no effect on the manufacturer's somewhat late activity. "They typically move real early or real late," said one cable network advertising sales executive. "But it doesn't matter. In this age of 60 plus cable networks, other than MTV, ESPN, and Nickelodeon, who is a must buy?" And the executive notes that delaying probably won't hurt General Motors--considering that the cable marketplace is much weaker than it has been in previous years. A General Motors spokeswoman had no comment about the company's upfront TV buying pursuits. "For them in cable, it's usually July 20th [when it starts], and you are done with them in August," said Bruce Lefkowitz, executive vp of advertising sales for Fox Cable Entertainment. "While they are big fans of cable, rarely is a vendor going to say 'we can't get you in.'"

Overall, cable networks' sales activity has been slow going--and is expected to slowly drift in throughout July. Most networks are still only halfway done with their upfront selling, say media executives. One media buying veteran expects that most established cable networks will be selling anywhere from 45 percent to 55 percent of their overall respective commercial inventory supplies during the upfront selling season--which is down versus a year ago.

Weak advertising demand for this upfront season has dampened cable networks' enthusiasm for price hikes. Originally, cable networks believed they could extract 5 percent to 8 percent cost-per-thousand viewer [CPM] program price increases. But executives now report that program prices will be weaker, with some networks seeing program pricing 3 percent below last year's rates, and others that could gain 3 percent.

Losing ground, according to executives, will be the Discovery Networks. On the plus side, Scripps Networks--Food Network, HGTV, DIY, and Fine Living--are getting as much as 4% hikes for their programs compared to a year ago.

Cable networks such as TNT, TBS, MTV Networks, FX, and Hallmark have completed anywhere from 55 percent to 70 percent of their intended upfront deals. Bill Abbott, executive vp of national advertising sales for Hallmark Channel, said activity is moving--but slowly. The channel has sold about 50 percent of its upfront inventory so far.

Magna Global USA, perhaps the biggest spender of national TV dollars, has been slow to move with cable networks, which is causing the lethargy. Magna Global represents about 20 percent of all national TV dollars, according to executives.