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Fox out of the gate in television upfront advertising sales

June 1, 2010 |  4:45 pm

Fox Broadcasting has launched this year's television advertising sales season -- another sign that companies are stepping up their purchase of television time to pitch their products after two years of cautious spending as a result of the economic downturn.

Demand for 30-second commercial spots on the Fox network has been brisk, several people familiar with the negotiations said Tuesday.

Advertising buyers and network executives predicted that all of the broadcast networks, including CBS, ABC, NBC and the CW, will begin selling their commercial time this week -- a sharp contrast from a year ago, when negotiations between the networks and advertisers dragged on through the summer.

"The market is moving quickly," said one executive, who asked not to be identified because negotiations were continuing. Fox began writing business late last week, two people said, and its efforts intensified Tuesday. The network should wrap up ad sales for the coming TV season by week's end, another  executive said.

Last year advertisers held back their ad budgets because of worries over the economy. And some key TV advertisers, including General Motors, were in bankruptcy.

HughHouse This year, however, several major advertisers have increased their marketing budgets. Financial firms and car companies have been leading the charge as GM, Toyota and Chrysler are rolling out ad campaigns to persuade consumers to buy their vehicles. Hyundai, Ford, BMW, Nissan and Subaru also are buying commercials to try to take advantage of the vulnerability of their competitors and increase their share of the market.

Insurance companies and cellphone providers, including Verizon and AT&T, are buying time as they slug it out for customers, and Apple and other device companies are advertising new products. Despite releasing fewer films, Hollywood studios are nonetheless lining up commercial time to promote their upcoming tent-pole movies, advertising executives said.

Top-rated TV network Fox, owned by Rupert Murdoch's News Corp., typically is the top pick among advertisers. Credit the laws of supply and demand. Fox has fewer hours to fill because it programs 15 hours in prime time each week compared with 22 hours by ABC, CBS and NBC.  In addition, the network has a stable schedule and big attractions including popular shows like "Glee," "House" and "American Idol," NFL football and next year's Super Bowl.

Fox has been able to command rate increases of 8% to 9%, according to people familiar with the network's strategy. The overall upfront advertising market, so named because the networks sell the bulk of their commercial time in advance of the fall season, is expected to be at least 15% higher than last year’s downturn-depressed $7.94 billion for the broadcast networks.

"TV is back in vogue," said one advertising buyer, who also asked for anonymity.  "Advertisers have come full circle and they recognize the importance of television to their marketing plans."

-- Meg James

Photo: Hugh Laurie, who plays Dr. Gregory House on Fox's hit TV series "House." Credit: Michael Yarish / Fox.