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CBS leads broadcast TV networks in upfront advertising sales

June 12, 2012|By Meg James
  • Mark Harmon stars in CBS' hit drama "NCIS." CBS led the 2012 advertising sales market because of its slate of proven hits.
Mark Harmon stars in CBS' hit drama "NCIS." CBS led the… (Cliff Lipson / CBS )

Broadcast networks CBS, ABC and the CW have wrapped up their advertising sales for the upcoming TV season -- using their muscle to extract rate increases for their commercial time, according to people familiar with the talks. 

CBS outpaced the other networks during this year's upfront advertising market, prominent ad buyers said Tuesday. As the most stable network, with proven hits such as as "NCIS," "CSI," "Big Bang Theory" and "How I Met Your Mother," CBS was able to draw larger rate increases from advertisers than the other networks, and rake in more total dollars in commitments.

CBS boosted its rates by about 10%, these people said, accepting orders for prime-time commercials totaling nearly $2.6 billion.

Walt Disney Co.-owned ABC managed to hike its rates 6% to 8%, taking in just under $2.4 billion.

The CW, which targets younger viewers, pumped its prices 7%. The small network, which programs 10 hours in prime-time each week (compared with 22 hours a week for ABC, CBS and NBC), notched nearly $400 million in sales.

NBC and Fox were continuing to negotiate with advertisers, according to executives familiar with the talks. Despite its perennial rating woes, NBC was mustering rate increases of nearly 6%. Fox, which finished the most recent season in first place among the advertisers' favorite demographic of viewers ages 18 to 49, was securing rate increases of about 8%.

When all of the money is counted, the networks will have sold roughly $9 billion in prime-time commercials for the upcoming season. The networks' overall haul is expected to be down this year compared with last year, the ad buyers said, because so many networks -- ABC, NBC, Fox and CW -- experienced ratings declines.

Ratings for juggernaut shows such as Fox's "American Idol,"ABC's "Dancing with the Stars" and NBC's "The Biggest Loser" were well off their high-water marks. So even though the networks managed rate increases, most will actually take in about the same dollars as last year. 

The price of television time is calculated through a complicated formula that includes the estimated ratings for individual shows and the ad rates, called CPMs, or cost per thousand viewers. 

The biggest wild card this year was Detroit carmaker General Motors' refusal to pay higher rates for advertising time during a period when networks are losing viewers. In recent weeks, GM said it would not advertise in the Super Bowl or on Facebook.

The high-profile GM standoff left several hundred million ad dollars on the sidelines during the television upfront market, and also contributed to the networks' smaller takes, the ad buyers said. It was unclear Tuesday whether GM had purchased any time -- although the networks were holding out hope.

A buyer for GM refused to comment.

Nonetheless, the steady pace of the upfront market -- the networks have sold nearly 75% of their commercial inventory for the next TV season in just two and a half weeks -- underscores the fact that network television continues to be the most desired vehicle for major corporations to advertise their products and services.

Ad buyers have now turned their attention to buying time on the various cable networks.

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