Pre-upfront posturing is going into high gear as media companies report first-quarter earnings.
On CBS’ call with analysts, CEO Les Moonves broke out of an uncharacteristic reticence about setting high upfront expectations.
“We will be very aggressive going into the upfront,” Moonves said. “I can say with absolute confidence that we’ll once again lead the marketplace in both pricing and volume. The pricing increases will look a lot like they did last year from high-single to low double-digits. Yes, folks. There you have it. The numbers you have been waiting for.”
Moonves noted that everyone (except perhaps CBS ad sales president Jo Ann Ross) complained that Moonves hadn’t publicly set CBS’ price goal at double digits, which at this point is about double what most buyers and analysts are talking about.
“I’ve done it two years in a row. I’ve read at least three stories which are saying the networks aren’t bullish because Moonves hasn’t said double digits. So I have said double digits the last two years. Two years ago, we were up 12% to 13%. Last year, we were up around 9%. So I was slightly off. But if you average the two, I certainly was right and I’m confident again,” he said. “Look, as I said, there’s a lot of noise this time of year, but we are pretty confident in the hand we’re playing.”
That hand includes demand for advertising inventory that “is even stronger than it was at this same time last year, with scatter pricing up double-digits over last year’s upfront pricing,” he said.
Time Warner and Viacom execs also said that first-quarter ad revenues were good and that they expected the second quarter to be even better leading into the upfront.
Time Warner’s ad revenues were down 1% in the quarter due to the movement of the NCAA Final Four into the second quarter and a 10% decline at its news networks including CNN, according to CFO John Martin. Domestic advertising on Turner’s entertainment networks were up in the mid- to high-single digit range, he said.
“Looking at the second quarter, we expect overall Networks advertising growth to rebound and accelerate into the high-single digits,” Martin said. “In addition, the second quarter scatter market has been very healthy with double-digit premiums over upfront pricing.” Martin added that the company is also seeing improvements in the news category.
At Viacom, domestic ad revenues were up 2%, which is a big deal because ad revenues had been in a downward trend along with ratings at Nickelodeon.
CEO Philippe Dauman said on Viacom’s earnings call that the ad rebound correlates with improving ratings, but also with stronger demand.
“We’re seeing a better mix of advertising demand. So we’ve really made great strides in categories like autos, retail, quick-service restaurants, beverages, computer, hardware and software, but we’re seeing strength in important categories to add to our traditional areas of strength that’s been there,” he said. “Then pricing is very strong. We’re seeing-in the last quarter, we had-upfront-to-upfront pricing was up in the mid-single-digit area. Scatter-over-upfront, on average, for our networks was up about 20%. And if you look at scatter-over-scatter, that was up in the low double digits last quarter.”
Dauman says the kids upfront is shaping up well. “Our marketers need to be on our Nickelodeon networks. And so they’ve been working very closely with us, they’re rooting for us,” he said. “Apart from the toy category, we’re also seeing a lot of new video game launches, both on platform and games themselves, as we get into that holiday season. And we are growing our non-endemic business, such as automotive. Nickelodeon is a part of the house where automotive business has been growing, and other categories. And we’re able to capture more adult dollars as marketers are realizing that there are a lot of moms and dads watching our Nickelodeon networks.”
Dauman said that Nick’s upfront presentation in March was well attended and that advertisers he talked with were pleased with the network’s progress.