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TV Upfront Deals Finally Begin

29 Jul, 2009 Response This Week

NEW YORK – After a seeming stalemate between buyers and networks over pricing for upfront advertising, both sides appear to be reaching a compromise, which could allow the upfront season to close in as soon as two weeks. The five broadcast networks are finally conducting some media buying business, reports

NBC and FOX are leading the ad-buying process, with more than half of their upfront negotiations complete. Meanwhile ABC and the CW have completed some business and CBS has finalized negotiations with at least one major agency.

Buyers initially hoped CPM rates (the cost for reaching 1,000 viewers) would have a double-digit decrease, while networks wanted to increase sales by 1 or 2 percent, or at least maintain last year’s price. The compromise: CPM declines of 1 to 3 percent.

CBS has attempted to maintain flat rates but has been forced to do negative deals. NBC, which has struggled with ratings in comparison to other networks, has been offering CPM discounts in the mid-to-high single-digit percentage range. ABC has refused to drop below a 3-percent discount, while Fox is attempting to be more lenient.

Beyond the major role of the economy in these negotiations, pricing disputes over daytime spots, fall-season programming airing earlier (late summer) and clients pressuring buying agencies to achieve deep discounts are all obstacles to the upfront advertising market.

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