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Ad Spending For Kids Category Soft, Slow

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The kids advertising upfront is expected to move within the next few weeks, but media buyers are predicting that it will be softer—and move a bit slower—than last year, when close to $900 million was spent at a relatively brisk pace. It's a far cry from a few years back when buyers rushed to get their ad dollars down with the networks right after the early February Toy Fair, and the upfront usually wrapped in a day or two. Today, kids advertisers are choosing to be more strategic in how and when they reach their target audience.

"The kids marketplace has been evolving ... with so much more emphasis on licensing, packaging and programming deals, as opposed to traditional 30[-second spots], and these discussions are taking place 52 weeks a year," said Donna Speciale, president of broadcast and programming at MediaVest. Speciale said that when licensing deals are cut, on-air spots are built into those deals, which are then already in place by the time the kids networks open their doors for upfront business.

"Of course, you still have the advertisers like the toy and movie companies that need to be on the air during the 'hard eight' weeks [before Christmas and Easter], but there will be no massive rush by most advertisers to get their money down," Speciale said.

Elizabeth Herbst-Brady, director of broadcast investment for Starcom, agreed. "Agencies and their clients are not just looking for :30s. We have to consider all touch points," she said. "Kids has a lot of complexities. And every advertiser is facing the same situation. The process of upfront buying for kids continues, but we all have to do it more smartly. There will be no big rush, but it will get done."

Even kids network sales executives concede that upfront negotiations will probably move at a slower pace. "We are engaged in conversations with a few people," said Kim McQuilken, executive vp of ad sales at Cartoon Network. "We could have a few pieces of business done this week. The market won't break in one big clump, [but] probably in pockets."

Two factors are expected to drag down the pace and total of this year's market: uncertainty about ad spending by food companies (because of government concerns over health/obesity issues) and fewer premieres of big kids movies this fall and into the holiday season. If companies like Kraft, which traditionally spend big on kids shows, hold back significant dollars, and movie companies spend less, the total could drop by as much as $100 million. But that total could be offset a bit by an influx of new DVD advertising and more automotive dollars—a kids category that has been increasingly growing as automakers try to reach parents watching with their kids.

Speciale, who buys for Kraft, would not comment on the food maker's spending plans. But Kraft has said in official statements it plans to focus ad spending on products that have nutritional benefits to kids, and that in the coming year, all on-air promotion of food that does not meet the nutritional requirements will be pulled off all children's television.

While sales executives at the kids networks hope Kraft will come up with ways to re-express that money, Kraft may not do so in the upfront, choosing to buy scatter once the season starts. Shelly Hirsch, chairman of Summit Media Group, the media buying division of 4Kids Entertainment, said, "If the food category is soft, there is nothing to pick up the slack."

Jim Perry, Nickelodeon's senior vp of ad sales, concedes that Kraft brings some uncertainty to the upfront, but adds, "We are very comfortable with where the rest of the food category is going to be."

The movie category is clearly another potential problem for the kids networks. During last year's hard eight, close to a dozen kid movie premieres were heavily promoted. Right now, only one targets younger kids—The Lion, the Witch & the Wardrobe—while two others—Harry Potter and the Goblet of Fire and Zathura, a Jumanji sequel—target older kids. In terms of ad spending, five of the top 10 movies in 2004 were children's films premiered in the fourth quarter. Studios spent almost $214 million to promote them last year, according to Nielsen Monitor-Plus, and a good chunk of those dollars were placed on kids networks.

Still, with all the uncertainty, kids cable network executives believe the upfront market could be up by 10 percent, and they continue to believe that the 30-second spot will play the biggest role in media buys. "Toy companies know that a certain amount of GRPs are needed to move the sales needle," McQuilken said. Added Perry: "Thirty-second commercials will continue to be the backbone of the kids buy."