Analysts predict this year's kids' upfront will pull in 5% to 10% higher than last year's take of $850 million. That haul was down 10% to 15% from 2008 as food marketers such as General Mills, Kellogg and Kraft had to stem the flow of ad dollars while redeveloping their sugary cereals and snacks to meet new Food & Drug Administration and Federal Communications Commission standards. The kids' marketplace lost an estimated $100 million to $120 million last year alone, according to two executives, and is only expected to recover a fraction of those dollars this year as reformulated products start to hit shelves and roll out ad campaigns.
"With these new restrictions it becomes more difficult to increase the pie, so to speak," said Drew Crum, a children's-marketing analyst for investment firm Stifel Nicolaus. "With an increasingly more competitive landscape and a number of new entrants, that makes it harder for everyone to grow."
That's why mainstays such as Nickelodeon, Cartoon Network and Disney Channel are increasingly turning to older kids, tweens, teens and even parents to boost their bottom lines as their core marketing categories wrestle with government pushback. Jim Perry, Nickelodeon's exec VP-brand sales, recently told Ad Age that movie studios had surpassed food marketers as the network's biggest spender as a direct result of the FCC-mandated cutbacks.
Mr. Crum predicts cost-per-thousand-viewer rates to be up flat to low single-digits for kids' networks, with ad volume increases in the 6% to 8% range for this year's upfront. With so many moving parts and different players, Ad Age takes a look at how each of the networks are poised to do and how their ratings and revenues are holding up as they head into this year's market.
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