CBS Targets NBC in First Upfront Salvo

NEW YORK CBS chairman and chief executive Leslie Moonves fired the first seller shot in this year’s upfront when he said last week that the network deserves to reap as much as a 12 percent increase in the cost-per-thousand rates for the 2004-05 season. It didn’t take long for buyers to fire back.

Media agency executives acknowledged that CBS’ stable schedule and the fact that it added four solid shows to its schedule this season makes the network a more attractive buy. But they warned that it should not overplay its hand in the upfront negotiations, especially with opposition to upfront increases becoming more determined than ever.

One buyer said any CPM increase of more than 6 percent would be too much.

Moonves said he expects CBS to take ad dollars away from its competitors next season, particularly from NBC on Thursday night, when CBS anchors its lineup with mega-hit CSI. The upfront kicks off in mid-May.

He threatened that if advertisers balk, CBS could hold back inventory, as the network did three years ago, when it sold only about two-thirds of its ad time in the upfront.

That prompted Lyle Schwartz, managing partner of research at WPP Group’s Mediaedge:cia, to say that “I thought he was describing a new CBS sitcom.”

Moonves also noted that Friends, which was selling for a “huge amount of money,” will end its 10-year run this season, and its replacement, the spinoff Joey, “will not sell for nearly that amount.” This season, he added, “The Apprentice saved their bacon.”

Jeff Zucker, president of NBC Entertainment’s News and Cable Group, countered that the network only had 18 first-run episodes of Friends this season but will have 32 first-run hours of The Apprentice next season.

The Apprentice, he added, was the most watched in the 18-49 demo among $100,000-plus income households, which will allow NBC to charge advertisers a sizable premium. NBC also has seven of the Top 10 shows in that age and income bracket. “That’s why our [ad] pricing is 15 percent higher than our nearest competitor,” Zucker said.

Moonves said CBS will present media buyers with numbers that debunk NBC’s high-income-audience argument. Dave Poltrack, CBS’ evp of research and planning, called the $100,000-plus figure “the most bogus statistic out there,” and added, “We will be making the case that it’s CBS that has the most premium [audience] programs.”

CBS, traditionally the oldest-skewing network, is making that media vice something of a virtue this year. Poltrack said TV viewers in the 35-54 age range are the highest income earners, and that the 18-49 demo range is skewed heavily by the large number of 18-24-year-olds, some of whom live in households that earn more than $100,000, but those earnings are by their parents. He said if you filter out those 18-24-year-olds from the upscale-income 18-49 demo, NBC registers a sizable dip, while CBS programs move up.

“If you want to sell luxury items, you want to reach the person who controls the discretionary income, which is the parent, not the child,” Poltrack said.

“CBS’ stable schedule is a little more top of mind for buyers because of the lack of stability of the other networks’ schedules,” noted Steve Lanzano, managing director at Havas’ MPG, “and there is some validity to CBS’ older-audience argument. NBC will also have a lot more persuading to do in terms of selling their Thursday night at such high premiums.”

But Lanzano cautioned that “if CBS is overly aggressive on pricing, buyers will walk away, and then some of the money targeted to them could go to other networks or to cable.”

Mediaedge:cia’s Schwartz agreed with Lanzano that CBS’ older-audience arguments are “valid,” but he said that is of interest only to some advertisers, even within categories. “The same automaker can sell both a higher-priced luxury car and a lower-priced economy car,” he said. “Financial advertisers target both younger and older viewers.”

Schwartz also agreed with Lanzano that money could move-not only out of CBS but out of broadcast-if the networks try to price ad inventory too high.

“There is a lot more communication between the planners and buyers this year,” Schwartz said. “More clients have contingency plans in place where money can move out of broadcast into other venues if negotiations don’t go well.”