The kids upfront just isn’t what it used to be. While the annual round of pitch presentations by U.S. kids networks to advertisers and agencies is still obviously relevant, the fast-paced flurry of activity–where the majority of the year’s ad space is snapped up in a short period of time–has relaxed somewhat over the past several years. Blame it on the weak economy and uncertainty in the marketplace, if you will, but the financial risks of making upfront decisions in haste are just too great for most media buyers. Advertisers are willing and able, in many cases, to wait before deciding where to put their limited ad dollars.
Another reason for the buying delay is that well-rounded and complex marketing strategies–the kind that involve several players and platforms–simply take more time to negotiate. Relegating pitches to two days–and actually expecting the historic rush of immediate ad bookings–seems almost quaint in this environment.
‘The upfront is as important as it’s ever been, but it’s changed,’ says Jim Perry, senior VP of ad sales at Nickelodeon. He says that many programming, marketing and consumer product initiatives are still obviously tied to a future date, but are not necessarily negotiated during the traditional upfront period. ‘We are literally doing upfronts 52 weeks a year,’ he says.
‘Marketers are doing things much closer to air,’ agrees Bill Morningstar, senior VP of media sales for Kids’ WB!, adding that the annual kids upfront ties up roughly 70% of Kids’ WB!’s total ad space these days–compared to around 80% a few years ago.
But Morningstar goes on to say that this drop doesn’t lessen the significance of the kids upfront at all. Psychologically, players on both sides of the kids marketing fence seem to need the excitement generated by the annual rush to announce new programming and initiatives. The back-of-mind worry that key promotional windows will be snagged is good for business–and that’s good for everybody.
But if this past year has been defined by anything, it’s uncertainty, and that feeling is expected to loom over the 2002 upfront as well. Despite early predictions of a flat to slightly inflated market, overall media spending at last year’s upfront was down between US$50 million and US$100 million from the previous year.
Why such a steep drop? ‘Toy money is bringing the market down,’ claims John Wagner, assistant media director and lead kid buyer for Starcom Worldwide in Chicago. At one point, Wagner says, toys accounted for half of all kids spending; today, the category might make up 30% of total ad dollars. While spending is up from some of the smaller toy companies, the larger players are in a downward spiral, with the well-documented financial woes of Hasbro and Mattel not turned around yet.
Consider what’s happening to the second-biggest kids media category–packaged goods–and the picture gets even bleaker. A consolidation-happy industry–think Kraft Foods pairing with Nabisco and General Mills/Pillsbury, and Kellogg Company’s purchase of Keebler Foods last year–translates into reduced spending across the board. ‘That’s the whole point of consolidation,’ Wagner points out.
Couple these two factors with the general softness of the economy, which makes all advertisers–particularly those that consider kids a secondary market–second-guess every advertising dollar they spend, and the market is understandably bruised.
So what do buyers expect this year? Wagner, for one, anticipates even more cable growth. Success story Cartoon Network has all but eliminated the gap between itself and Nickelodeon; it is in almost 80 million homes now (up from 50 million three years ago), and its ratings continue to grow by leaps and bounds. According to MAGNA Global USA analysis of Neilsen data, Cartoon is now third among kids ages two to 11 on Saturday mornings–ahead of Fox, ABC and CBS–and it continues to thrive during the week.
Wagner says the big question is when advertisers will fully banish their cable bias. ‘I think a lot of advertisers still over-allocate revenue to the broadcast side of the equation, where there hasn’t been growth,’ he says. He points to the decision made by both Fox and NBC to drop their Saturday morning kids blocks (see ‘New kids block players vie for shares of the ad spend pie,’ page 39) as an indication of the trouble broadcast players are having with ratings. ‘The real question is whether people will make the smart adjustments and move more of their money to cable,’ says Wagner.
The perception that cable buys mean missed households isn’t yet declining, according to Wagner: ‘The delivery patterns and where the viewership is has changed much more rapidly than the advertisers have adjusted their mix.’ But the best price-value often isn’t offered by broadcast anymore, especially when an advertiser looks at what can be achieved promotionally on cable. ‘We wouldn’t advocate 100% cable, but I think advertisers are going to see that they don’t need as much broadcast as they once did,’ says Wagner.
According to Magna Global USA’s analysis of Nielsen data, broadcast networks’ kids ratings have declined sharply in recent years, with kids two to 11 only watching .69 hours of network programming in Q4 2001, compared to .9 hours for the same period in 2000. This decline becomes more significant when you take into account the total number of hours kids spend watching children’s programming each week across broadcast and cable. That figure has risen in each of the past three Q4 reports–a total of 8.38 hours a week in 2001. Ad-supported cable accounted for almost eight hours (7.69) of weekly viewing in 2001, up from 7.17 hours the previous year.
So what are the major kidcasters doing to grow their share of total ad spending? A quick check-in puts cross-platform initiatives, promotions and exciting new shows at the top of everyone’s list.
Kids’ WB! showcases its boy expertise with new original toons
The frog net seems to have bounced back from its Pokémon dependency. The once white-hot show, which helped propel the network’s ratings to 2.4 with kids two to 11 and 3.4 with boys two to 11 in 1999, lost some of its momentum in 2000, driving overall channel ratings down dramatically. But in Q4 2001, Pokémon: Johto League Champions and X-Men: Evolution were netting the channel’s highest ratings, especially among the key demo of boys two to 11. Johto League boasted a 4.7 rating with this audience group, while X-Men rang in with a 4.9.
The 2001/2002 season is the first in which all of the network’s new shows were created and developed in-house, and it seems the insular strategy will pay off. The Kids’ WB! Saturday morning slate includes The Nightmare Room and The Mummy, which has racked up a 4.38 rating with boys two to 11.
Kids’ WB! executive VP Donna Friedman says the channel will continue to focus on its core six- to 11-year-old boy audience in 2002/2003. ‘In this crowded marketplace, it’s important to keep your sights on what your focus is and where your expertise lies,’ she adds. This is especially true now that Fox Kids, which also went after boy viewers, has left the building.
New boys programming for next season will include Ozzie & Drix, an animated half-hour series based on the film Osmosis Jones, which opened last August and grossed US$13.5 million during its eight-week run. The new show will feature characters that reside inside the body of a 14-year-old boy going through puberty’s oh-so-embarrassing physical changes. Friedman says the series will lean heavily on action-adventure and gross-out humor, as well as containing an educational component for its key audience.
Kids’ WB! will also continue to grow its appeal to both genders, says Friedman. ‘The more gender-neutral our shows are, the better.’ That could explain the network’s decision to launch a new, modern Scooby-Doo series in partnership with Cartoon Network. The show will put the Scooby gang to work solving crimes in the 21st century, using modern-day gadgetry like cell phones and the Internet to bust the baddies.
In addition to the strength of Kids’ WB!’s new programming, Morningstar is confident that the channel’s joint upfront presentation with Cartoon Network will offer media buyers a very tempting platform. ‘Put the two of us together, and you have something that marketers want,’ he says. ‘Cartoon gets the reach up quickly, and we fill in the non-cable households, taking that reach up another notch.’
Promo powerhouse Cartoon Network offers greater ROI
With every kids media buyer and advertising client looking to get more bang for their ad buck this year, Cartoon’s 2002 upfront plan emphasizes sponsorships and promotions as a way to offer some added value. Kim McQuilken, the channel’s executive VP of sales and marketing, says promotional activity is the key ad spending driver after distribution and ratings–and no one does promos better than Cartoon Network.
Hasbro, Mattel and Nintendo are on-board for Total Immersion events in Q4 2002, special Cartoon promos designed to drive eyeballs back and forth between the channel and the web. The latest Total Immersion event, sponsored by Quaker and Gatorade, was January’s ‘Batman vs. Superman.’ It provided www.cartoonnetwork.com its most trafficked day in history, with 9.2 million pages viewed on Saturday, January 26. The program (which aired Monday to Friday from 6 p.m. to 7 p.m.) netted 13.2 million viewers and double-digit ratings increases across all demos except teens.
McQuilken echoes Morningstar’s sentiment that the Cartoon Network/Kids’ WB! relationship is much more clearly defined this year and should be a force to be reckoned with at the upfront presentations. ‘We worked together as best as we could last year, but it was really sort of ad hoc,’ he says. ‘This time around, we have had a full year of preparation.’ McQuilken says the two nets plan to work together to an even greater degree this year, with several cross-programming and cross-promotional initiatives brewing at press time.
The biggest change Cartoon will make this year is to focus more of its attention on teens and young adults. ‘We’re not going to take our eyes off our core kid business, but we’re spending a lot of energy, programming and sales time going after the teen and young adult market with non-traditional advertisers,’ says McQuilken.
Nick goes to market on top of the ratings game
Stalwart kidnet Nickelodeon has reaped the rewards of waiting out the Pokémon craze. The channel was back on top for Q4 2001, boasting the only two programs to average higher than a 5.0 rating among kids two to 11–Rugrats and SpongeBob SquarePants.
‘We’re feeling good going into the upfront presentations,’ says Nick’s Perry, who adds that the net’s Q1 2002 ad sales look strong thanks to an increase in activity from movie studios and packaged goods companies.
But Nick has been working hard to diversify its advertiser portfolio beyond these linchpin categories. Coups on this front from last year include signing on advertisers such as Ford Motor Company, Target Corporation, Bahamas Ministry of Tourism and Embassy Suites Hotels, and Nick is determined to keep building on these base deals in 2002.
In addition to branching out to new advertisers, Nick is putting a lot of advertising emphasis on its new TEENick block, which hit airwaves in March 2001. Beverage companies, movie studios and video game manufacturers are just a few of the company types Perry says the Nick sales team will be targeting heavily.
Nick’s multi-platform initiatives have also become more critical as advertisers look for better return on their investment, and Perry’s team tries to ease every advertiser that comes on-board into all three mediums–on-air, on-line and Nickelodeon magazine. ‘It’s more than just advertising,’ espouses Perry. ‘We want advertiser programs to be tied creatively and seamlessly throughout the three platforms.’
Disney bets on theme park exposure to hook media buyers
One-stop shopping is the overriding appeal at Disney Channel, says the net’s president of entertainment Rich Ross, who’s also responsible for kids programming on ABC Family: ‘We’ve combined the sales force from ABC Family and the former Disney Kids network so there is one group selling kids on cable, which is really important.’
Another tantalizing characteristic that could sway media buyers at this year’s kids upfront is Disney’s ability to support its advertisers’ initiatives through its theme parks. ‘Going forward, we know that we would be smart to have all the pieces working–not to over-exploit but to appropriately exploit,’ says Ross.
Toon Disney, meanwhile, will play up its unique stature as the only 24/7, fully commercialized Disney property. ‘It’s a growing network, and buyers are attracted by the possibility of being part of it early on,’ says Jonathan Barzilay, GM and senior VP of Toon Disney and ABC Kids.
This fall, Toon Disney will air Teamo Supremo, which just premiered on ABC’s One Saturday Morning block. It will also be adding the popular House of Mouse (which has been on ABC since ’99), along with Sabrina the Animated Series. ‘Multi-purposing and cross-promoting among platforms is increasingly important in the kids business,’ says Barzilay. ‘Our company intends to take full advantage of all of its kid-targeted platforms.’
New kids block players vie for shares of the ad spend pie
AS the amorphous kids broadcast market continues to evolve, this year’s kids upfront will see the entry of three new players–ABC Family, the 4Kids block on Fox, and the Discovery Kids block on NBC. Tim Spengler, executive VP and director of national broadcast at Initiative Media, says the newbies will be contending with some pretty tough hurdles initially. ‘The players that don’t have a track record and that are not selling full nights or days will face a challenge,’ he says. However, Spengler points out that the supply-demand seesaw–which has dipped in the buyers’ favor for several years now–is starting to even out, thanks to the exit of broadcast networks. ‘There won’t be more money this year, but there will be fewer players fighting for it,’ he says.
ABC Family’s game plan for getting a piece of the pot revolves around a prime-time boys action block. ‘We know there’s an opportunity for several strong players targeting boys,’ says Disney’s Ross, adding that Fox’s exit from the target leaves an opening for another viable player besides AOL-Time Warner’s two platforms. Disney is currently applying its considerable creative instincts to the task of creating original programming for the block; in fact, Ross spent much of his time at Toy Fair last month scouting for new concepts. But because development takes time, these homegrown properties won’t likely show up until 2003, he says.
New York’s 4Kids Entertainment has plenty of content with which to work, according to CEO Al Kahn–it’s simply a matter of working out what should air. However, he does say definitively: ‘It will be a boys action block.’ At press time, the company was in the process of selecting its programming. Three sure bets: Kirby (based on Nintendo’s video game property) and two anime series–Ultraman Tiga and Kinnikuman.
4Kids’ main concern right now is how it will sell advertising for the block. With the deal just over a month old at press time, 4Kids has had little time to consider whether it will try to connect with an existing team from another broadcaster or start its own internal group.
Kahn says that this year’s upfront will be a challenge, but he believes the company’s unique position as a Saturday-only programmer with an entire roster of unique shows should help. ‘Many advertisers want Saturdays,’ says Kahn, who plans to heavily promote the programming on other networks. Besides figuring out just who will sell the Saturday block, 4Kids needs to work out its CPM–quite a challenge for an entity that has no historical CPM record.
Discovery Kids, meanwhile, has been meeting with agencies informally regarding its new Saturday morning block on NBC, but is still busy finalizing distribution deals before making any formal presentation, according to director of communications Matt Katzive.
The new block, which will target kids nine to 14, will be almost entirely comprised of new shows. ‘There may be one or two series that migrate from Discovery Kids, but the vast majority that’s being considered right now is original,’ says Katzive.
The same sales team will be responsible for both the channel and the new block, but the channel will forgo a kids upfront presentation this year as it works to solidify its programming strategy and lineup.