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CBS Starts to Sell Advertising in TV’s Upfront Market


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TV’s upfront ad-sales market is slowly starting to budge.

CBS has begun to sell advance advertising commitments for its coming programming schedule, according to two executives with knowledge of the pace of negotiations in this annual haggle between U.S. TV networks and Madison Avenue. When it comes to primetime ad slots, these people suggest, CBS has been seeking high single-digit to double-digit percentage increases in the cost of reaching 1,000 viewers – a measure also known as a CPM that is central to this sales market, in which the networks try to sell the bulk of their ad time. The network is pressing for double-digit percentage price increases for ad time sold in daytime, news and late-night programming, these people said. CBS sought high single-digit to low double-digit percentage increases for primetime in last year’s upfront talks.

CBS declined to comment on its progress in the upfront.

Other networks are engaged in active discussions, according to media buyers and other executives. These people said the networks have pressed initially for mid-to-high double-digit percentage CPM increases for primetime commercial inventory. Media buyers are working to rebuff the effort.

NBCUniversal in particular is trying to get the highest rate-of-change increases, these people say, seeking CPM hikes of 15% or more – compared with 8% to 9% secured in last year’s negotiations. Media buyers say Walt Disney’s ABC and 21st Century Fox’s Fox Networks are waiting to see what NBCUniversal is able to command in the market before trying to move forward in earnest. These people say Fox, which in January signed a five-year deal to carry the NFL’s “Thursday Night Football,” has placed heavy emphasis on selling ad time in sports. The CW is also engaged in discussions.

“As linear ratings continue to fragment, the negotiations become harder and harder. Supply is reduced but clients and agencies do not want to pay more for less,” says one buying executive. “Finding ways to extract value from these negotiations is key.”

NBCUniversal, ABC, CW and Fox declined to make executives available for comment on the state of their talks with advertisers in the upfront.

Billions of dollars in ad support are at stake. The nation’s five English-language broadcast networks attracted between $8.69 billion and $9.55 billion in advance commitments for their primetime schedules, compared with between $8.41 billion and $9.25 billion in 2016, eking out an approximate 3% to 4% gain in the volume of advance advertising commitments they secured. Those results were robust, possibly marking the most they’ve gleaned since 2004, when six broadcast networks (the WB and UPN were still around, in place of CW) secured around $9.5 billion.

CBS’ efforts have been buoyed by interest from pharmaceutical companies, according to one media buying executive. CBS has long been a favorite roost for drug advertising, owing to its broad and sometimes older audience. The pharmaceutical companies, which often run longer ads due to laws that require the disclosure of side effects, try to buy up ad time in morning and evening news and late-night where prices are not as high as in primetime.

These companies have been expected to spend heavily in the upfront, as they did last year. And because of general erosion of TV ratings, the pharmaceutical sponsors’ rush to daytime, news and late-night has the effect of goosing rates. CBS has pressed for CPM increases in the double-digit percentage range for ad inventory in daytime and late night, according to two of the executives.

CBS’ structure also helps, one buyer notes. Its portfolio is smaller and more streamlined than those of its rivals.

The market may have cracked open, but media buyers caution it’s may not break wide – at least for the moment.

NBCU’s upfront effort is more complex, owing to the scale of its TV portfolio, and it’s desire to secure what buyers consider high rates. NBCU is this year seeking a substantial premium for a new primetime ad format as it tries to reduce the number of commercials it runs during some of its most popular programs on broadcast and cable.

There are several other factors at play that could slow the upfront down.

Advertisers have begun to rely more heavily on rival forms of media, including social, mobile and digital. What’s more, a number of big marketers have placed media accounts into review, which is likely to place pressure on their current agencies to secure the lowest CPM increases possible.

There could be more fog ahead. And the future of many of the big TV companies is unknown: AT&T is hoping to gain approval of its bid to buy Time Warner, owner of Turner. 21st Century’s Fox effort to sell the bulk of its assets to Disney faces a rival bid from Comcast. And CBS management is battling with its controlling shareholder, National Amusements Inc., raising speculation over who will lead the company down the road. Ad sales teams may not know whether they are trying to meet current management’s goals or working to impress whoever may be running the company in the not-too-distant future.

Cable networks have also joined the fray. Discovery Inc., for example, is trying to gain higher pricing for its Investigation Discovery, one of the first big moves by Jon Steinlauf, the company’s new ad-sales chief, after Discovery finalized its purchase of Scripps Networks earlier this year.
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