TV’s ‘Upfront’ Ad-Selling Season Closes

By SETH SUTEL

NEW YORK – Walt Disney Co.’s ABC network said Wednesday it had completed its advance advertising sales for the coming fall season, drawing a close to a tepid “upfront” ad-selling season for major television networks.

Networks sell about 75 percent of their advertising in advance of the fall season and the sales are closely watched by Wall Street as an indicator of advertising demand.

ABC said it pulled in about $2.3 billion in advertising commitments, up from $2.1 billion a year ago. The network was able to convert strong ratings from hits like “Lost” and “Desperate Housewives” into price increases of between 3 and 4 percent.

ABC got off to a slow start, starting to sell ads last among the major networks, because of an early standoff it had with advertisers over whether to count ads that are viewed on digital video recorders. ABC eventually gave in.

Other networks had varied performances. Fox, a unit of News Corp., sold around $1.8 billion in advance advertising commitments, up from $1.6 billion last year, riding out its successful “American Idol” franchise, according to a person familiar with the matter who asked to remain unidentified because of the confidential nature of the talks.

But General Electric Co.’s NBC, a laggard in the ratings, had to cut prices by about 5 percent from last year and wound up with an estimated $1.9 billion, roughly comparable with last year, after selling more spots to make up for the weak pricing, a person familiar with the talks said.

Advertisers are increasingly looking to other, more targeted media like cable TV and the Internet to reach their customers. Also, Johnson & Johnson, a major advertiser, is sitting out the upfront season this year to adjust its ad-buying schedule more closely with the budgeting process for its own brands.

“The market was soft this year, reflecting some movement of marketing funds away from traditional media to more emerging media,” Tim Spengler, director of national broadcast at Initiative Media Worldwide. Also, soft demand resulted in a slower than usual marketplace, Spengler said. “In stronger years there’s more of a sense of urgency.”

CBS was believed to be writing an estimated $2.4 billion in business, and The CW, a new network formed with shows from The WB and UPN, which are shutting down, was pulling in about $650 million, according to people with knowledge of the matter who also wanted to remain unidentified because of the private talks with advertisers.

That would put the overall network prime time take at around $9 billion, down from an estimated $9.1 billion a year ago. The market was also down last year as well.

Mike Shaw, the head of advertising sales for ABC, said the network sold a slightly smaller amount of ads this season, saying there were “fewer dollars in the marketplace than a year ago.” However, he was optimistic about sales of the remaining ads later in the season, in what’s known as the “scatter” market.

Shaw said ABC was seeing good results from its experiment of streaming hit shows like “Lost” over the Internet along with ads that can’t be skipped through, but he said the network hadn’t yet processed the results from the test, which ended June 30. ABC didn’t include in the upfront season any sales from its new media projects such as the streaming episodes or video-on-demand.

Like many major marketers, Yum Brands Inc.’s Taco Bell unit was an active participant in the annual ad-buying season but fine-tuned its plans amid shifting viewing patterns.

Debbie Myers, a marketing executive at Taco Bell, said the company hadn’t bought any spots on CBS last year but did so this year as the newtwork had some “interesting pockets” with strong viewershiop among Taco Bell’s core 18-34 year old audience, such as ‘Survivor,’ ‘Amazing Race’ and ‘Big Brother.’

Myers also said Taco Bell was moving some money to cable TV from networks as viewership migrates there.