Universal’s Jeff Lucas says value key to next upfront

Jan 6, 2003  •  Post A Comment

The 2003 upfront won’t be a buyers’ upfront’ or a sellers’ upfront-it will be a “value upfront.”

That’s the early prediction from Jeff Lucas, president of advertising sales, Universal Television Networks. “The networks that have strong original programming and bring value to the advertiser are going to come out on top,” he said. “The networks that don’t do that will be also-rans.”

Mr. Lucas said Universal’s own upfront pitch will be distinguished this year by a new emphasis on cross-platform deals.

“You’re going to see some deals come out that, as far as cable goes, are going to stand out from the pack,” he said. “We’re going to link the promotional side of [`Monk,’ `Dead Zone’ and other USA and Sci-Fi shows] with the promotional side that Universal Pictures offers. We can reach into theaters; we can reach into [Universal] theme parks; we can reach into the checkout counter at certain stores and chains. We can do that while a lot of our competitors have to manufacture those assets. … It’s going to become the core asset for the advertiser.”

Additionally, Universal’s cable ad sales are expected to tie in on cross-platform deals with Barry Diller’s USA Interactive, which includes Home Shopping Network, Ticketmaster, Expedia and Hotel Reservations Network, among others, “to touch the consumer even further,” Mr. Lucas said. “We are in talks about doing that. … Where it makes sense, we’re going to link all the assets together.” By contrast, in the 2002 upfront at Universal, there were no cross-platform deals.

Generally speaking, the 2001 upfront was a buyers’ upfront, and the 2002 market was a sellers’. In 2001, the broadcast market moved after NBC struck volume/share deals, abandoning the networks’ cherished ’90s strategy of ever-higher costs-per-thousand. In 2002, the cable market moved after Mr. Lucas, who joined Universal from NBC just before the 2002 upfront, announced that USA Network would cut CPMs for greater dollars. That risky, aggressive and very public ploy worked.

In the 2002 upfront, revenues “nearly doubled” and the sellout rate went from 35 percent in 2001 to 75 percent, Mr. Lucas said. “That enabled us to partake in the scatter market in a very healthy manner.”

At a recent press conference, Michael Jackson, chairman of Universal Television Group, indicated the new strategy this year would be to go for higher CPMs, rather than increased share.

Moving product off shelves

And while Mr. Lucas made the point that Universal’s upfront strategy isn’t set in stone yet, he did say that the success of such series as “Dead Zone” and “Monk” on USA and the “Taken” miniseries on Sci-Fi, plus a massive increase in the two networks’ programming budgets ($300 million to $400 million over the next two or three years, according to Mr. Jackson) made the upfront strategy shift possible.

“The main thing is we are producing original programming now,” Mr. Lucas said. “We had to do what we had to do last year to get us back in the game. But our main premise is we deliver value to the advertiser. Our goal is to help them move product off the shelf.”

In 2002, USA and Sci-Fi expanded their client roster by “more than” 40 new advertisers for each network, Mr. Lucas said.

“We’re sitting in a very different way now,” he said. “We’re going to give fair value for the dollar.”

Presentations to agencies and advertisers are already under way, and the emphasis is on “showing how we have original programming in the world of cable that you’re not going to find on many other networks that have advertiser-friendly original programming,” Mr. Lucas said.

“We’re not going to sit on our laurels. We’re going to take `Monk’ and `Dead Zone,’ we’re going to use them in the upfront. But we’re also going to introduce a couple more series. We’re going to build off `Nashville Star’ [USA’s country music version of `American Idol’]; … we have `Traffic’ [a miniseries] coming out this summer; we’ll have something similar next year. We have `Helen of Troy’ [a miniseries] next year. … The key to Universal Television is we are going to separate ourselves from the other cable networks.”

The Advertising page is edited by Louis Chunovic, who can be reached by phone at 212-210-0233, by fax at 212-210-0400, or by e-mail at lchunovic@crain.com.