The media buying agencies have blinked.
During negotiations that lasted into the early hours of this morning, upfront buying was completed with the CW network, with significant business also being written by major agencies with ABC and CBS, all at average prices higher than the agencies had said earlier they were willing to pay.
The CW confirmed that it was virtually done with its primetime upfront deals, averaging cost-per-thousand increases of 7.5 percent, and taking in about 20 percent more total ad dollars than it did last year. That would push the CW primetime upfront total to $360 million.
Sources familiar with the negotiations told The Wrap that both ABC and CBS wrote its prime time business at average price increases of 8.5 to 9 percent. And sources also said that NBC was in active negotiations on deals in the 7 percent range, but no deals had been finalized. Both ABC and NBC refused to comment. A spokesman for CBS confirmed that some deals were done, not giving any percentages.
After a few days where negotiations were proceeding slowly, things suddenly heated up with the CW around 5 p,m,Thursday, indviduals close to the deals told TheWrap. And after about five hours of "fast and furious negotiations," deals were completed with all major agencies.
Driving the CW deals was its "convergence initiative," under which the network sold advertising time on both its televised shows and those same shows which will be streamed online. The CW is planning to stream its entire primetime lineup online, and most of the deals included advertising on both.
Advertisers who bought convergence packages, which includes both traditional TV units and online full episode streaming, got one combination guarantee for their TV/online package, the individuals said.
In a statement, Rob Tuck, executive VP of national sales for the CW, said, "We’re thrilled that our convergence initiative has been a resounding success with the advertising community as the vast majority of our clients have bought both on-air and full episode streaming online."
Tuck said the network saw ad growth in several categories, including health and beauty, retail, wireless and both domestic and foreign autos.
Tuck told TheWrap that the network did deals with about 20 new advertisers who are not traditional CW clients and who tend to want to reach the more broad 18-49 demo of the other networks, rather than the CW’s 18-34 female audience.
One big motivating factor in that was the addition to the schedule of the action drama, "Nikita," which CW President Dawn Ostroff said during the upfront presentation to advertisers, was geared toward bringing in a slightly older viewer to the network, to broaden its audience. That apparently resonated with advertisers.
Hot and heavy negotiations also began later last night with ABC and lasted well into the early morning hours, with CBS also closing some business last night, individuals close to those deals told TheWrap.
What caused the ad community to push to get deals done at price increases higher than they had said they were willing to pay?
The amount of money advertisers had to spend as their clients budgets kept coming in was greater than even the agencies anticipated, the individuals said. And as is usually the case, once one major agency commits to deals, the other agencies follow.
It was not immediately know which agency led the stampede.
But there was a heavy demand for daytime commercial inventory, and ABC and CBS have a number of daytime soap operas. "Daytime inventory is much cheaper than prime time but advertisers can still reach a lot of women," one industry individual told The Wrap. "So adding lower priced daytime inventory to overall ad packages can balance out higher prices paid for prime time commercials."
While ABC made significant progress last night, and CBS is also moving along, it is not expected that they will be totally done by the end of Friday, primarily because unlike Fox (which only sells 15 hours of prime time) and the CW (which only sells 10 hours of prime time), ABC and CBS also have inventory to sell in early morning, daytime, evening news and late night. It just takes more time.
Commenting on the resurgent performance in the upfront by the CW, Jed Petrick, former president and COO of the WB network, which merged with UPN to form the CW, told TheWrap, "The CW’s addition of digital advertising opportunities have proven to be a strong calling card for both the network and the marketing community. Hats off to them for recognizing the opportunity and making attractive deals to seize upon it."
Petrick, the original head of sales at the WB, left in 2004 before the CW was formed and is currently with Balleehoo, a media and marketing consulting company.