Fox TV Stuns Its Rivals With Advance Ad Sales Two-Thirds That of CBS

Fox Broadcasting Co., launched only three years ago, stunned the television business this week by selling two-thirds as much advertising for 1990-91 as CBS during the crucial “up-front” sales period.

The bonanza for Fox is a potent illustration of the high risks but potentially enormous rewards of the network television business. It also shows how the competitive distance between Fox and third-place CBS is narrowing.

Fox sold about $550 million worth of advertising time for its expanded schedule of five nights of programming totaling 18 1/2 hours. Last year, Fox sold $300 million in the up-front market--where the networks sell a majority of their prime-time advertising for the coming season--and aired only three nights of programs totaling nine hours.

CBS, which last year sold $1 billion, this year sold only $900 million, mainly because of its lower prime-time ratings and its concentration of older viewers, who are less attractive to advertisers.

Advertising agency executives say Fox was so successful because its schedule of shows such as “The Simpsons,” “Married With Children” and “In Living Color” attracts large numbers of viewers between the ages of 18 and 34 whom advertisers want to reach.

In a risky programming maneuver that turned out to be a smart financial move, Fox has scheduled “The Simpsons” against NBC’s “The Cosby Show” on Thursdays at 8 p.m. Ad agency executives said it cost advertisers $300,000 to $400,000 to buy a 30-second commercial spot on “The Simpsons,” equivalent to rates charged for “Cosby” or ABC’s “Roseanne,” the two biggest hits on television.

“Although Fox accounts for only 15% of an advertiser’s budget, they still have a high impact among younger viewers,” explained Joel Segal, executive vice president at New York ad agency McCann-Erickson. “And they are getting a lot more credibility” as a network.

One reason Fox did so well--about $50 million better than it anticipated--is that movie studios were willing to pay a premium to reserve time in its Thursday night schedule. Studios, which need to reach the 18- to 24-year-old movie-going audience, advertise heavily on Thursday nights to promote the weekend’s slate of movies. The only concentration of young adults available on Thursday night has been on NBC.

NBC, which last year had sold a total of $1.7 billion of prime-time advertising during the up-front market, this year sold $1.5 billion because of its lower ratings and loss of young adult viewers this past season.

Only ABC among the big three networks managed to do better than last year. Thanks to improving prime-time ratings, especially among young viewers, ABC saw its take of the up-front advertising market increase to $1.4 billion from $1.2 billion last year.

H. Weller Keever, vice president of sales at ABC, said ABC sold 85% of its prime-time commercial time for a record gross. He also said commercial rates were the highest they’ve ever been.

Network executives said, however, that the overall up-front market was a disappointment and below their initial expectations. Early reports anticipated the networks would sell several hundred million dollars more of advertising than turned out to be the case.

The total prime-time advertising market hit $4.35 billion, compared to $4.2 billion last year, an increase of only 3.5%. Although network executives did not expect the 27% leap recorded in last year’s up-front market, they nonetheless had hoped for a stronger showing this year from automotive companies, the largest advertisers on television.

“The marketplace did not turn out as large as we thought it would,” said Keever. “I think people are holding back for scatter.” The “scatter” market refers to when advertisers buy commercial time during the TV season rather than in advance.

But Larry Hoffner, NBC’s chief advertising salesman, believes that the overall market came in below expectations because automobile companies, which account for about $700 million in prime-time advertising, had to hold down their budgets in order to pay for the increased cost of advertising on sports shows.

“In order to pay for the sports rights fees, we had to charge more for spots. So there was some shifting of money,” he said.

The next step for the networks is to finish up-front advertising deals for their daytime, early evening news and late-night time periods. Last year, ABC, CBS and NBC sold a total of $9.5 billion in advertising.

‘UPFRONT’ AD SALES

Advance advertising sales for prime time

NBC

1989-90 season: $1.7 billion

1990-91 season: $1.5 billion

ABC

1989-90 season: $1.2 billion

1990-91 season: $1.4 billion

CBS

1989-90 season: $1 billion

1990-91 season: $900 million

FOX

1989-90 season: $300 million

1990-91 season: $550 million