California: General Electric’s NBC Universal has closed a major advertising deal with McDonald’s Corp for its fall season and is set to complete another deal, a sign that a stalemate between ad buyers and sellers may be easing.
The company had clinched the deal to air McDonald’s ads during Jay Leno’s 10-pm talk show in the fall, an NBC spokesman said on Wednesday, adding it was close to another deal that came out of a presentation with GroupM, a unit of advertising agency WPP.
Networks and advertisers have been looking to NBC, the lowest-rated US broadcaster, to break a months-long stalemate in advance or upfront advertising sales for the fall season by setting a floor in prices for the rest of the industry.
Some analysts had predicted that NBC’s ad rates would decline by double-digit percentages compared with last year.
But Ben Silverman, co-chairman of NBC Entertainment and NBC Universal Television Studio, provided a surprisingly upbeat assessment on pricing on Wednesday.
“You are seeing healthier numbers than I think we anticipated,” Silverman told industry executives at the Fortune Brainstorm: TECH conference in Pasadena, California.
He would not disclose terms of deals, but said the declines in pricing were “not close to what was forecast.”
Silverman said upfront sales would be affected more by declines in volume than decreases in pricing, and that NBC expects to sell less than the 80% of inventory it moved in last year’s upfronts, or advance sales.
Media watchers have been looking for signs of life in the market for ad deals after discussions between advertising and television executives largely stalled during the industry’s annual dealmaking season.
As of late June last year, Disney’s ABC, NBC, CBS and News Corp’s Fox had wrapped up $9.2 billion worth of deals with advertisers in the upfront market, the industry’s annual dealmaking season, when the two sides traditionally negotiate about 75% of the commercial time for the next TV season.
This year, media and ad executives have said they expected the process to stretch into the middle of August.
Negotiations had largely stalled with buyers reluctant to stretch marketing budgets in the middle of a recession and broadcasters — hoping to boost their bottom lines — holding out for higher prices.
NBC now anticipates a rebound in scatter — or spot ad — pricing in 2010, because struggling General Motors and a fledgling Fiat/Chrysler had sat out upfront negotiations as they formulated new marketing plans based on upcoming changes in product lines.
“We’re all collectively, as a broadcast business, planning for that return a little bit,” Silverman said.