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Upfront goes under execs’ microscope

May 7, 2001  •  Post A Comment

In this era of transition, will the institution of the upfront survive? Despite the economic downturn, will the TV advertising marketplace continue to thrive?

And with viewers newly empowered by programming choices and new technologies, how will advertisers move from a marketplace based on the “principle of intrusion”-as Robert Brennan, president, Leo Burnett Worldwide, summarized the cusp on which TV advertisers find themselves-to an “age of engagement” with their potential customers?

Those were just three of the questions debated when senior time buyers met senior time sellers at the first Upfront Television Advertising Summit, sponsored by Electronic Media and sister publication Advertising Age.

The event, held last week at the Grand Hyatt Hotel in midtown Manhattan, featured nearly two dozen panelists discussing syndication, cable and broadcast television advertising issues. The keynote address was delivered by Robert Pittman, co-chief operating officer, AOL Time Warner.

“The upfront is based upon two things: scarcity and fear,” said Erwin Ephron, media consultant, Ephron Papazian Ephron. “I think the upfront will go away. … [It] is the tip of the iceberg of an archaic trading system.”

Larry Divney, president, Comedy Central, disagreed. “I think the upfront is here to stay,” he said, “[but] the configuration of the upfront is certainly going to change … based on necessity, whether it be supply and demand, whether it be new media opportunities available, whether it be cross-promotional, cross-platform or Internet.”

“The upfront is useful to us,” said Brad Simmons, vice president, media sales, Unilever, “because it really focuses our attention … on making a significant investment every year. Frankly, it helps get our brand managers focused on getting budgets together so we can do business.”

But in an age of multiple media “touch points” for reaching consumers, Mr. Simmons added, “We do have to find a way to take a broader view. I think the upfront will be part of that.”

The upfront’s “success metrics” will have to change, said Ed Erhardt, president of ESPN/ABC Sports Customer Marketing and Sales. “I don’t know if it’s always going to be about what percentage increase, decrease or flat pricing sellers and buyers got. … The success metrics are going to be about not only the amount of money that gets invested but how it gets invested-and, increasingly, how well do sellers, buyers and clients figure out how to … create programs that actually work, that move the needle, that move [the] product?”

About this upfront’s bottom line, there was little bottom-line consensus. With money tight, “second and third tier” cable networks might not get the “flow-down” they received in the past, said Andrew Donchin, senior vice president, director of national broadcast, Carat USA.

In general, the uncertainties in the economy mean that clients are more bottom-line oriented than they have been in the past, said John Lazarus, senior vice president, director of broadcast operations, TN Media. “Budget levels are not where they were [in recent years],” he added.

With budgets down, the incentive is up for the bigger companies to do deals in-house. “Certainly people are going to spend money in the family if they can,” said Jon Nesvig, president of sales, Fox Broadcasting. “One-stop shopping is the name of the game,” agreed Bob Mancini, senior partner and executive director, Ford Motor Media, who pointed to the fact that consolidation has happened on both the agency and the seller side. “Consolidation nation,” is how Dan Rank, director, OMD USA, characterized the phenomenon. “This is a national business cycle we’re going through,” he added. “I’m not positive that bigger is better, but I’d don’t think it’s bad either.”

And Bill McGowan, executive vice president, advertising sales, Discovery Communications, reiterated his prediction that the marketplace will be flat overall, with cable benefiting from advertiser defections from broadcast TV. “This is clearly a value marketplace,” he said. “This is the time to be spending money, when there are bargains out there.”