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Outcome of upfront is anybody’s guess

May 13, 2002  •  Post A Comment

Uncertainty was the shaky word from media executives on the eve of this year’s TV upfront advertising market, the annual sell-a-thon where marketers buy a season’s worth of commercial time.
At the second annual Electronic Media/ Upfront Television Advertising Summit last week in New York, executives noted that though market conditions have improved, not all is well with TV advertising.
“The economy is healthier, but there is a lot of uncertainty,” said Mel Berning, president of U.S broadcast, Bcom3 Group MediaVest Worldwide, New York, on a panel of network executives. “Unemployment is up, and corporate profits look horrible.”
Some categories will indeed slow down-particularly pharmaceuticals. The $2 billion direct-to-consumer drug category, which grew by double-digit increases over the past several years, slowed to just 7 percent growth in 2001, said Donna Campanella, director and team leader for media, Pfizer.
“We are seeing a maturity in the marketplace,” she said. “We’ll still be spending, but we may need to take a step back.” Direct to consumer advertising has come under increased scrutiny from Congress lately.
One point on which media executives agreed is that the marketplace will not return to the days when broadcast network upfront selling was completed in four days.
“A slower pace is to everyone’s benefit,” said Dan Rank, managing director of broadcast, OMD USA, New York. “The timing will be similar to last year-about mid-June.”
Media buying executives also expressed concerns about network program development. “The broadcast networks took the easy way out with news shows and, more recently, reality and game shows,” said Donna Speciale, executive VP, national and local broadcast, Grey Global Group’s MediaCom, New York. “But this is not sticking. There has not been a hit in a year and a half. [Networks] are going backward. Airing Mary Tyler Moore and Carol Burnett [specials] is pretty sad.”
Executives were most uncertain about the syndication business-in which last year program suppliers cut budgets by some 30 percent. One executive on the summit’s syndication panel, Fred Dubin, executive VP and director of national broadcast, Mediaedge:cia, questioned: “Is syndication a stepsister in these mega-media companies?”
Not surprisingly, syndication sales side executives disagreed.
“Syndication is playing an increased role in cross-media deals,” said Michael Teicher, executive VP, media sales, Warner Bros. Domestic Television Distribution.
Good news for cable networks could come as a result of increased network pricing. “The danger is on the broadcast network side-they charge twice the [cost per thousand] of what [a] cable network charges,” Mr. Rank said, adding for cable, “clearly, the difference is on the supply-and-demand ratio. It’s almost impossible for cable networks to sell out.”
Information-centric cable channels such as ESPN, CNBC and CNN, which run video plus an assortment of other graphics on screen at the same time, may face their own special challenge going forward: clutter. Ed Erhardt, president of ESPN ABC Sports Customer Marketing, worries about selling “whole screen” advertising vs. “partial screen” advertising. “It may not be an issue this year, but it could next year,” he said.
Keynote speaker Chris Clouser, executive VP and chief global marketing officer, Burger King Corp., cited concerns over media consolidation as well as media agencies that want to retain their old-line commission structures.
“That doesn’t work anymore,” he said. “Would you pay your mechanic [with] a percentage of the parts he used to fix your car?” Mr. Clouser said.
He added that agencies should perhaps consider contingency fees that would link pay to their clients’ sales performance.