The summer months leading up to the start of the new children’s television season in September used to be a low-key season for buyers and sellers of kids advertising, but no longer. There’s been more and more post-upfront scrambling in recent years, and this summer saw a significant amount of last-minute shifts and cuts in national ad schedules. And the networks have continued to tinker with the schedules they announced last February.
Summer is also when the local spot TV market starts to heat up, especially for toy advertisers looking to place their key fourth-quarter budgets. Meanwhile, a parallel set of negotiations is taking place between advertisers who have backed syndicated kids shows with ad budgets and the stations that have committed to carry those shows and are now locking down their fall schedules.
In the national marketplace, almost all of the networks were writing kids business in July. Although major advertisers placed their upfront orders in an all-night frenzy in February, they finalize their purchases-or ‘go to order,’ as it’s called-in July. Clients who have seen their budgets cut are allowed to modify their upfront buys; technically, anyone can change an order for any reason, but doing so purely to get a better deal is a breach of market etiquette.
The problem, says Gary Carr of Ammirati & Puris/Lintas, is that ‘the upfront happens too damn early.’ The last couple years, it has even preceded the American International Toy Fair, a time ‘that makes no sense for the toy business,’ says Shelly Hirsch, CEO of Summit Media, a kids media specialist. ‘In late February, the only thing a toy company knows is that Christmas is over.’
The biggest kids cutbacks this summer came from non-toy advertisers. Kellogg’s and Burger King both trimmed their kids commitments, say sources from the buy-and-sell sides. Kellogg’s got clobbered by cost-cutting in the cereal business, while Burger King pulled back after losing its heavily promoted kids meal tie-ins with Disney to archrival McDonald’s Restaurants.
Networks were able to sell the newly freed-up scatter spots to clients who didn’t get their money down in February, or to smaller toymakers who don’t spend enough to merit an upfront deal. While the market has been active, it has been far from frenzied. ‘I don’t sense any monstrous demand out there,’ says Carr. ‘There used to be times I’d be buying fourth-quarter [kids] scatter in April, but in the last few years, most of the kids money has been spent upfront.’
Some networks that were heavily sold or maybe even oversold for the fourth quarter were said to be happy to get some inventory back. ‘Fourth quarter has been 90 percent sold for a few years,’ says Carr, which d’esn’t leave much room for quick make-goods if schedules fail to perform.
Inventory is heavily affected by ratings performance. Kids WB, the only broadcaster to overdeliver on its ratings promises last year, ‘hasn’t been cut back much,’ reports Kids WB sales chief Jed Petrick. ‘We’re cheap [compared to the other networks' cost per thousand (CPM)], and the community seems to feel we have upside.’ Thus, WB hasn’t written much new business, he says. Conversely, a buyer notes that Fox Children’s Network, which has seen its ratings shrivel over the last year, d’esn’t have too much inventory to sell.
The networks have continued to massage their Saturday morning schedules. Fox had to shift shows after Saban pulled back Masked Rider to plug into its syndicated lineup in place of VR Troopers. And ABC has benched Hypernauts in favor of Flash Forward, a live-action teen sitcom. In an example of Disney/ABC synergy, that broadcast exposure will help the show when it airs on the Disney Channel next year.
Tightness in the national kids marketplace usually affects prices in spot TV markets. And though network CPMs rose 12 to 18 percent this year, there has not been any stampede by spot buyers. The growth in network prices came from a decline in the supply of rating points, not vastly increased demand, says Tom Horner, group media director at DMB&B Advertising. ‘More people have moved their money to the national scene. I haven’t heard of any panic [spot] buying, and it hasn’t been a super year for toys.’
Nor is there much compelling syndicated kids programming for spot buyers to chase, Horner adds. ‘The Mask hasn’t been performing very well on CBS recently-for the second quarter, it averaged a 3 rating, so in syndication it’ll be a 1.5- to 2-rated show.’ He notes that aside from three Disney shows-Aladdin, Gargoyles and Timon & Pumbaa-’nothing else in syndication did a 2 rating in the second quarter, and that’s pretty bad. We’ll see further deterioration in syndication this year.’
Many, if not most, syndicated shows are cleared over the winter because major advertisers promise to spend large amounts of money with the stations that pick up the shows. The spot market, which heats up over the summer, is driven by those early commitments.
‘The spot market is starting to shape up,’ says Summit’s Shelly Hirsch. ‘Reality happens by the end of August.’
He explains the summer mating dance this way: Last winter, agency X promised to spend $2 million with station Y to secure a time slot for an advertiser-backed show. Now the agency comes back and offers $1.2 million, with $900,000 of it deferred into next year. So, the agency asks: ‘What’s the unit cost for the show, and what time period do I get: 6 a.m. or the much more desirable 7:30 a.m.?’
Toymakers are also looking at their order patterns, and if they haven’t sold into one of the big national retailers, they will probably cut back ad support for that line. ‘Right now, stations are separating the wheat from the chaff-or the shaft, if you will, because that’s what they ultimately get,’ says Hirsch. ‘It’s a game of cat and mouse.’
The problem is that too many stations are more interested in grabbing the most ad dollars than in putting together a solid program lineup. ‘The quality of most shows is so horrific that the ratings stink,’ says Hirsch, ‘and the ratings are so low, you can’t put money into producing the show or getting a good licensing program. It’s a self-fulfilling prophecy.’