Few Advertisers Pull Back on Upfront Buys

From Survivor to Mullets, the buyers aren't kidding

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.

The Cost of Spots, Fall 2003
The average price (in thousands) of a 30-second commercial
Program Price Program Price Program Price Program Price Program Price Program Price
Source: Ad agency and network executives, based on upfront sales
Monday Night Football$350Survivor$425The Simpsons$370Friends$380Enterprise$100Smallville$125
The Bachelor250CSI400Malcolm in the Middle326Will & Grace360Girlfriends75Gilmore Girls115
Alias200Everybody Loves Raymond40024320ER355Half & Half70Everwood112
The Practice195CSI: Miami350Joe Millionaire290Scrubs310Eve597th Heaven110
NYPD Blue195Without a Trace250That '70s Show260Coupling300The Parkers55Charmed100
8 Simple Rules190Two and a Half Men195The Ortegas260Law & Order275One on One45Tarzan and Jane92
My Wife & Kids190Still Standing185Bernie Mac215The West Wing215All of Us43Angel80
According to Jim185Yes, Dear175Skin210Law & Order: C.I.205Smackdown38One Tree Hill77
I'm With Her175Judging Amy162King of the Hill208Frasier197Rock Me Baby30Reba75
Less Than Perfect175King of Queens145American Juniors185Law & Order: SVU170Jake 2.030Smallville: Beginnings75
Prime Time Thursday15560 Minutes135Arrested Development185Vegas160The Mullets25Grounded for Life70
20/20155Becker130A Minute With Stan Hooper175Good Morning, Miami155Friday Movie14Like Family68
Karen Sisco155The Guardian127Cedric the Entertainer165The Lyon's Den150All About the Andersons65
It's All Relative150JAG125Oliver Beene160Third Watch145Jamie Kennedy Experiment65
Extreme Makeover140Cold Case120The O.C.140Fear Factor130What I Like About You60
George Lopez135Navy NCIS116Boston Public125Boomtown106Run of the House50
Wonderful World of Disney135The Handler110True Calling110American Dreams105Steve Harvey's Big Time50
10-8130CBS Sunday Movie110America's Most Wanted95Miss Match110
Hope & Faith13060 Minutes II103Cops90Happy Family95
Life With Bonnie125Joan of Arcadia100Wanda at Large90Ed100
Funniest Home Videos125The District95Luis85Whoopi86
Back to Kansas125Hack85Dateline Friday86
Threat Matrix120Brotherhood of Poland, N.H.80Saturday Night Movie70
Prime Time Monday11548 Hours Investigates71Dateline Sunday60
L.A. Dragnet90