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This could be the year that simple-minded SpongeBob Squarepants gets a lesson in supply and demand.
Fewer kids are watching commercial TV. Except for Kids WB, with its Japanese animation hits Yu-Gi-Oh! and Pokemon, and Toon Disney, which is adding distribution on cable, ratings are down this season. If this continues, it will mean the networks have about 8% fewer sets of kids eyeballs to sell to advertisers looking to peddle toys, snacks, clothing and movie tickets.
But this could be good news for cable's Nickelodeon and Cartoon Network. Because in the Alice-in-Wonderland world of ad buying, prices could go up like a Powerpuff Girl.
And the leading ad buyers aren't happy about this.
"If there's less ratings in the market, then unfortunately it does affect pricing where you'll have to pay more for less," says Donna Speciale, Mediacom's director of national broadcast. Mediacom clients, including Hasbro, Dannon, Warner Bros. and Conagra, account for about $120 million of the $650 million that is expected to be spent in the kids upfront. (With scatter added in, ad spending on kids reaches nearly $1 billion per year.) "I don't know why that always happens."
Thanks to Cartoon Network's growth into a full-fledged competitor to Nickelodeon, ad buyers have gotten used to having a growing pool of gross ratings points to buy for their clients. But so far this season, the trend has reversed. Gross ratings points are computed by taking the ratings in a particular demographic and multiplying those by the number of spots for sale. Adding those up gives you the GRP inventory, according to noted media consultant Erwin Ephron.
An analysis of Nielsen season-to-date ratings data by the crackerjack Turner Broadcasting research staff shows that the number of GRPs available per week among kids 2 to 11 is down 8% from last year. Among the broadcasters - mostly on Saturday morning - GRPs are down 14%. On cable they're down 7%.
Similarly, among kids 6 to 11, there are 10% fewer GRPs available weekly for advertisers. GRPs are down 4% for the broadcasters and 14% on cable. Some of those viewers may be moving to the Disney Channel, which does not accept traditional advertising.
On broadcast, delivery is off sharply for Fox, which sold...