upfront 2011

Almost a month removed from the first TV upfront deals between media agencies and television networks, two of the bigger players still haven’t come to terms. Media agency giant Group M still has not completed an upfront deal with Turner Broadcasting Groups networks, TNT, TBS, CNN, truTV, as of late in the day, Thursday, June 30.

It was a watershed upfront for the cable TV business, which took in about $9.2 billion in ad money this year, matching what the broadcast networks took in. Why did advertisers spend about $1.2 billion more in ad dollars on cable networks in this year’s upfront than they did last year, increasing their cable spending by 15%, while investing only 5% more in broadcast? Here’s what their media buying agency executives say.

Advertisers, for the first time, are shelling out as many dollars to book commercials in advance on cable television as they are on broadcast networks, allowing cable outlets to command big increases in their ad rates.

Reality shows on cable, once looked at by advertisers as the ugly stepchild of broadcast primetime scripted programming, have become the darlings of national marketers, with networks such as Bravo, TLC, E! and VH1 rubbing their hands in anticipation of this year’s upfront buying. Shows like Bravo’s Top Chef and its Real Housewives series, TLC’s Cake Boss and Police Women series, VH1’s Mob Wives, and E!’s Keeping Up with the Kardashians, just to name a few, are putting these networks in play for big time upfront ad dollars.

After a disappointing season in which the majority of its new shows flopped and many aging ones saw ratings declines, ABC has made sweeping changes for this fall. The network will use established hits to launch new shows and shake up all but two nights, with Monday the only weeknight returning intact.

For the second consecutive year, marketers are poised to spend more money in advance on commercials for the coming TV season than they did a year earlier, driven in part by unusually high prices for last-minute commercials this spring, according to both buyers and sellers of TV advertising. As a result, the cost of advance commercials, sold in an annual marketplace dubbed the “upfront,” is expected to rise sharply.

A Barclays Capital report continues the trend of forecasting a stellar upfront for cable networks, but throws some cold water on the ad market at large. Volume for the cable market is projected to jump about 15% over a year ago. Cable is expected to take in total dollars on par with the Big Four broadcast networks for the first time, with both at $9.2 billion.

With the 2011 TV Upfront meetings between TV studios and advertisers in full swing, Nielsen takes a look at emerging trends in TV viewing.

For the first time in many years, broadcast networks’ overall ad volume during the upcoming upfront market will grow strongly to over $10 billion, according to one media analyst — as well as averaging double-digit percent gains.

TV networks rubbing their hands together in anticipation of a spectacular upfront may want to stop for just a few moments. Recent events could threaten to tamp down upfront activity, suggested Barcalys Capital analyst Anthony DiClemente in a research note issued today. The analyst sees trouble brewing among several important advertising categories including auto and retail.

A short time after getting bonked on the skull by the recession and a crackdown on food marketing, the cable networks targeting the 12-and-under set have rebounded. Heading into the 2011-12 upfront, ad sales anticipate a record windfall, with early commitments piling up beyond the $1 billion mark.

This year’s upfront will be a lot different than last year, when advertisers snatched up broadcast and cable inventory at a head-spinning pace, leading to huge gains over a dismal 2009. While scatter prices have remained strong throughout this year, always a promising sign for the upfront, analysts don’t expect spending to see the same gains as last year.