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Fox launches TV ad sales season

The network is seeing strong demand for 30-second commercial spots, sources say. The others are expected to begin selling time for the upcoming season this week.

June 02, 2010|By Meg James, Los Angeles Times

Fox Broadcasting has kicked off this year's television advertising sales season — another sign that companies are stepping up their purchase of TV time to pitch their products after two years of cautious spending because of economic uncertainty and the recession.

Demand for 30-second commercial spots on the Fox network has been strong, several people familiar with the sales said Tuesday.

Advertising buyers and network executives predicted that all of the broadcast networks — CBS, ABC, NBC and CW — will begin selling their commercial time this week, a sharp contrast from a year ago when negotiations between the networks and advertisers dragged on through the summer.

"The market is moving quickly," said one executive who asked not to be identified because negotiations were ongoing. Fox began selling time late last week, two people said, and efforts intensified Tuesday. The network should wrap up its "upfront" sales for the upcoming TV season by week's end, another executive said.

Last year, advertisers held back because they were worried about the economy. And some key TV advertisers, including General Motors, were in bankruptcy.

This year, however, several major advertisers have increased their marketing budgets. Financial firms and carmakers have been leading the charge as GM, Toyota and Chrysler have been rolling out ad campaigns to persuade consumers to buy their vehicles. Hyundai, Ford, BMW, Nissan and Subaru also are spending big to try to increase their share of the market by taking advantage of the vulnerability of competitors.

Insurance companies and cellphone providers, including Verizon and AT&T, are big advertisers too as they slug it out for customers. Apple Inc. and other technology and device companies are advertising new products. And despite releasing fewer films, Hollywood studios are nonetheless lining up commercial time to promote their big-bet movies for the coming year, advertising executives said.

Fox, the top-rated network owned by Rupert Murdoch's News Corp., typically is the first pick among advertisers. Credit the laws of supply and demand. Fox has fewer hours to fill because it programs 15 hours in prime time each week compared with 22 hours on ABC, CBS and NBC. In addition, Fox has a stable schedule and with popular shows such as "Glee," "House," "American Idol," NFL football and next year's Super Bowl.

Fox has been able to command rate increases of 8% to 9% this year, according to people familiar with the network's negotiations. Last year, Fox sold $1.74 billion in advance ad billings, according to Wells Fargo Securities, down 11.2% from the year before. This year, the network is expected to top $1.9 billion, according to a person familiar with the situation.

Most industry observers expect the overall "upfront" ad market, so named because the networks sell the bulk of their commercial time before the fall season, to be at least 15% higher than last year's recession-depressed $7.94 billion.

meg.james@latimes.com

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