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 $350 Survivor $425 The Simpsons $370 Friends $380 Enterprise $100 Smallville $125
The Bachelor 250 CSI 400 Malcolm in the Middle 326 Will & Grace 360 Girlfriends 75 Gilmore Girls 115
Alias 200 Everybody Loves Raymond 400 24 320 ER 355 Half & Half 70 Everwood 112
The Practice 195 CSI: Miami 350 Joe Millionaire 290 Scrubs 310 Eve 59 7th Heaven 110
NYPD Blue 195 Without a Trace 250 That '70s Show 260 Coupling 300 The Parkers 55 Charmed 100
8 Simple Rules 190 Two and a Half Men 195 The Ortegas 260 Law & Order 275 One on One 45 Tarzan and Jane 92
My Wife & Kids 190 Still Standing 185 Bernie Mac 215 The West Wing 215 All of Us 43 Angel 80
According to Jim 185 Yes, Dear 175 Skin 210 Law & Order: C.I. 205 Smackdown 38 One Tree Hill 77
I'm With Her 175 Judging Amy 162 King of the Hill 208 Frasier 197 Rock Me Baby 30 Reba 75
Less Than Perfect 175 King of Queens 145 American Juniors 185 Law & Order: SVU 170 Jake 2.0 30 Smallville: Beginnings 75
Prime Time Thursday 155 60 Minutes 135 Arrested Development 185 Vegas 160 The Mullets 25 Grounded for Life 70
20/20 155 Becker 130 A Minute With Stan Hooper 175 Good Morning, Miami 155 Friday Movie 14 Like Family 68
Karen Sisco 155 The Guardian 127 Cedric the Entertainer 165 The Lyon's Den 150 All About the Andersons 65
It's All Relative 150 JAG 125 Oliver Beene 160 Third Watch 145 Jamie Kennedy Experiment 65
Extreme Makeover 140 Cold Case 120 The O.C. 140 Fear Factor 130 What I Like About You 60
George Lopez 135 Navy NCIS 116 Boston Public 125 Boomtown 106 Run of the House 50
Wonderful World of Disney 135 The Handler 110 True Calling 110 American Dreams 105 Steve Harvey's Big Time 50
10-8 130 CBS Sunday Movie 110 America's Most Wanted 95 Miss Match 110
Hope & Faith 130 60 Minutes II 103 Cops 90 Happy Family 95
Life With Bonnie 125 Joan of Arcadia 100 Wanda at Large 90 Ed 100
Funniest Home Videos 125 The District 95 Luis 85 Whoopi 86
Back to Kansas 125 Hack 85 Dateline Friday 86
Threat Matrix 120 Brotherhood of Poland, N.H. 80 Saturday Night Movie 70
Prime Time Monday 115 48 Hours Investigates 71 Dateline Sunday 60
L.A. Dragnet 90