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Few Advertisers Pull Back on Upfront Buys

From Survivor to Mullets, the buyers aren't kidding

By Steve McClellan -- Broadcasting & Cable, 9/14/2003 8:00:00 PM

In late May and early June, when the biggest network prime time upfront market of all time took place ($9.4 billion), there was much speculation that advertisers would bail out of a larger-than-normal chunk of those upfront commitments.

There were even predictions that the bail-out would match or surpass the $400 million to $500 million that advertisers took off the table two years ago during the recession.

This time around, the thinking went, it would occur if only because advertisers were ticked off at the hefty price hikes.

But, with most orders now firmly in place, the speculation is proving untrue. Agency and network executives say the level of upfront "breakage," as the sellers call it, is actually below the typical 2% of ad commitments that fall out of bed.

According to a BROADCASTING & CABLE survey of average unit rates, CBS's Survivor, at $425,000 per 30-second spot is the highest-priced show on the networks this fall; NBC's sitcom Coupling, at $300,000 is the highest-priced new show.

UPN's The Mullets is television's bargain basement, at $25,000 a pop, the lowest-priced of the new shows and second-lowest-priced of all, just ahead of UPN's Friday Movie at $14,000.

NBC remains No. 1 in terms of the highest average cost of a spot across 22 hours of prime time at $180,000. But Fox's average across 15 hours is higher at $193,000.

The consensus seems to be that, this year, the upfront slippage will come in under $100 million. And sources say that about half the total is likely to come from one advertiser—Unilever—which has pulled approximately $50 million in ad buys from the six broadcast networks.

The package-goods company has been struggling to meet profit projections, and the ad-spending cutback is part of the effort to meet the 2003 target, sources say.

No other advertiser has pulled anywhere near that amount, sources say. And three of the six networks say that, for every dollar that one advertiser has pulled, someone else made up for it by adding to its commitment.

"A lot of people thought that a greater percentage would fall off the table, but, in fact, that has not happened," says Ray Dundas, senior vice president, group director national broadcast, Initiative. "Certainly not at our shop and, from what we hear, across the industry as well."

Part of the reason, observers say, is that advertisers feel they have to be on TV just to maintain market share no matter what shape the economy is in. And, as Dundas notes, scatter prices are expected to remain significantly higher than the upfront so advertisers would just as soon plunk the money down early.

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