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Broadcast Nets Hit the Jackpot

All dayparts, not just prime time, saw increases in a hot upfront market 6/01/2003 08:00:00 PM Eastern

For the second consecutive year, the major broadcast networks sold their entire upfront advertising inventory—across all dayparts—in one week-long frenzy. For a change, the blur of dollar signs extended through all the dayparts: from early morning, to daytime, prime time and late night. In a blinding burst, advertisers spent roughly $13.1 billion on the broadcast networks this year, up 9% from a year ago.

Putting It All Together
All dayparts
Source: Broadcasting & Cable research
NBC $4.1 billion
ABC $3.4 billion
CBS $3.0 billion
Total $10.5 billion

Although the headlines in the business press concentrated on upfront buying in prime time, the market was red hot everywhere this year.

NBC sold $100 million more for the Today
show and Nightly News
combined than in last year's upfront. Today
show pricing was up 14%. Late night was also up, with price hikes in the 14%-15% range.

ABC sold approximately $3.4 billion across all dayparts, up 21% from a year ago. That includes a prime time market that reached almost $2.4 billion, with about $600 million of prime time sports, including pro football, basketball and hockey.

It also includes a full season of the late-night entry Jimmy Kimmel Live, which was added to the schedule last January, as well as upfront sales for portions of big-ticket specials such as the Academy Awards telecast.

One of the biggest surprises was the resurgence of the daytime daypart, which had taken some huge hits in volume and pricing in the past couple of years. This year, sources estimate, dollars in the daypart were up 13%-15%, totaling between $910 million and $925 million.

ABC grabbed the biggest single share of daytime dollars, raking in close to $400 million. CBS wasn't far behind with about $360 million. NBC, which has fewer daytime shows, collected the rest: between $150 million and $165 million.

"Pharmaceuticals drove the daytime marketplace up big," says Bob Riordan, senior vice president, national broadcast, for MPG. He and others said that package-goods money was up as well. They also said a number of daytime advertisers moved a lot of money budgeted for scatter into the upfront.

"Daytime is a very efficient daypart now because it's been tanking in the last couple of years, taking some pretty serious rollbacks in pricing," says Riordan. His estimate is that, over the past two years, daytime prices dropped 18%-20%.

But not this year. With high demand, "people just jammed dollars into that daypart," he says. Prices were said to be up by 11%-12%.

"Daytime was absolutely a surprise," says Mike Shaw, president of sales and marketing, ABC-TV. He believes that the same computer models—known as optimizers— that told advertisers to buy cable in daytime in the past spit out different data this year.

"We still deliver a daytime rating to 99% of the country, and it's first-run programming 52 weeks of the year," he says. "That's pretty impactful. I think the optimizers pushed the daytime money back to the networks."

Plus, he adds, soap opera fans—like the viewers who follow All My Children
and other soaps on ABC—are a passionate bunch focused on the program and not channel surfing.

The early-morning daypart was also up sharply—so sharply that all three networks were said to have been unable to write all the business offered them. Price hikes were comparable to those received in prime time (mid teens) while the volume of money was said to be up 15%-18% and close to $735 million.

Today, with the highest ratings and a third hour, captured the biggest share, which was said to approach $400 million, while ABC's Good Morning America
commanded roughly $225 million and CBS's The Early Show, though a distant third, was said to have grabbed $110 million.

The late-night daypart also experienced strong demand, reportedly driving about 20% more dollars into the daypart—which exceeded $500 million—while prices were up by 15%-17%. "Late night was extremely healthy, and pricing came in just under prime time," says one executive familiar with the numbers.

The evening news shows didn't command the price hikes that other dayparts did, but, significantly, they too were up in pricing and volume. Sources said ad rates were up in the mid single digits while total dollars were up 10% to more than $350 million.

Altogether, most of the total upfront money ($10.5 billion) went to the Big Three, which took in 5% more than a year ago. Once again, NBC collected the single biggest share of dollars, about $4.1 billion across all dayparts, confirmed NBC Television Network Group President Randy Falco. That's up about 5% from a year ago.

Fox took in $1.6 billion of the total upfront dollars, The WB $710 million and UPN ($250 million).

March