• by Wayne Friedman , October 12, 2005

The 2005 fourth-quarter TV kids' TV advertising market--which still commands most of the kids' TV money of any period, about $200 million--has slowed down in terms of revenue and program pricing growth versus the hot market of a year ago.

For the crucial end-of-the-year kids' TV buying period, media executives say pricing is up mid- to single-digit price increases versus the upfront selling period, with overall revenue up to single-digit increases as well.

But all this is down versus the rip-roaring pace of last year that witnessed strong double-digit increases--all from strong DVD and home video marketing as well as a decrease in program ratings inventory.

"It's a different year than a year ago," said Jim Perry, senior vp of advertising sales for Nickelodeon. "Last year's upfront was stronger than the upfront this year. People held onto some money this year."

Although advertising sales have been slow going, now Perry says sales are picking up, with Nickelodeon sold out for the first three weeks of October. For most advertisers, the period leading into the holiday buying season--known as the "Hard Eight" or the "Hard Ten," which refers to the eight or ten weeks leading into the holiday selling season--is when most of the TV dollars are spent.

Leading kids' TV networks Nickelodeon and Cartoon Network have both been under-delivering somewhat to advertisers so far this year. Nickelodeon is off some 2 percent from ratings guarantees, while Cartoon Network is down about 10 percent. Perry says some unsold inventory in the fourth quarter has been used for advertiser make-goods, which have helped to prop up pricing.

Food advertisers are among the marketers who have cut back on kids' TV programming--all stemming from threatening Federal oversight into kids' obesity and health issues. Kraft Foods pulled TV marketing dollars earlier this year; candy and confectionary marketers also lowered media spending. Compared to other categories that are slightly up, media buying analysts estimate that kids' food advertisers are spending at the same levels in TV revenue versus a year ago.

Other categories have been harder hit. Home video marketer is down a couple of percentage points in overall revenue versus a year ago, as a glut of DVDs has caused marketers to pull back.

"DVD marketing hasn't been as strong," says Nickelodeon's Perry, "but theatrical is more than making up for that." Perry says the number of theatrical releases is on par with the number of releases versus a year ago.

Bigger changes affecting the kids' TV programming are coming. Proposed rules set to take effect in January 2006 would restrict the amount of promotional time in a given week that networks are allowed to use to promote other kids' shows or Web sites. Previously, networks were never restricted in their use of program promos. Now, those promos--as with kids' advertising time--will have limits.

Both Time Warner--owner of the cable network Cartoon Network and the over-the-air Saturday morning kids' TV block, KidsWB--and Viacom, owner of Nickelodeon, are fighting the proposal.

Shelly Hirsch, chief executive officer of Summit Media Group, believes this will affect smaller-size kids' TV programmers--such as Discovery's programming block of shows on NBC--who already have a tough time in promoting kids' shows. Kids' marketers will also be affected--since program promo time, according to the proposal, will now be counted as advertising time. That means fewer commercial units to sell.

Said Hirsch: "In the end it would drive up the cost of business."