OMD’s Upfront Upset

Jun 23, 2003  •  Post A Comment

Flexing the $3 billion muscle it brings to the national TV marketplace, Omnicom Group’s OMD, New York-backed by two key clients-is formulating a strategy to upend the upfront.
According to those with knowledge of the plan, OMD executives met last week to create a buying strategy in the fourth and first quarters leading up to the network TV upfront, the annual springtime ritual in which broadcasters sell blocks of time for upcoming program schedules at volume discount to marketers. Such a move would challenge the way TV buying is done and conceivably move the market to an earlier date by several months.
“This is about changing the whole menu,” said an OMD executive who requested anonymity. ”It has to do with gathering our clients and OMD together to start the market in the fourth quarter and early first quarter and base it on ideas, so that you have maybe 30 strategic ideas, eventually, over 10 clients.”
OMD, which was the largest network TV buyer in 2001, counts on its roster blue-chip clients, including FedEx, Hershey Corp., Johnson & Johnson, McDonald’s, MGM Distribution Co., Nissan, PepsiCo., Visa and Universal Pictures. It could not be determined which two clients are on board with the new plan; a third client is said to be joining in.
The movement, led by OMD North America CEO Page Thompson, is to develop a buying strategy early so that its clients can also plan to spend in other media, such as print, events, sports marketing, outdoor and the Internet, rather than rushing to the TV market at the last moment. Mr. Thompson declined to comment.
The upfront has long been the subject of media buyer and marketer frustration. This year, with advertisers committing $9.3 billion to broadcast, with cost-per-thousand price increases rising as much as 20 percent, frustration has led to anger. One OMD executive said most years, discussions with clients for an upfront strategy occur in March. “They go out in March, and you know what they talk about? They talk about what the [cost-per-thousand] increases are going to be and they talk about moving everything into the upfront and not wait for scatter. That’s what it’s about.”
Part of OMD’s strategy is to commit to established shows that will be back for the fall season, such as NBC’s “ER,” and then build integrated programs around them. Others see potential problems with that strategy.
“You want program deals, you can do them early, but you have to pay a premium for it,” said a media company executive who requested anonymity.
“We take the risk buying the programming.” If time is bought in the upfront, networks guarantee a certain level of ratings points, regardless of which programs they appear in. One competitor was unimpressed with the plan. Mel Berning, president, U.S. broadcast at Publicis Group’s MediaVest, said the OMD idea is nothing new. “This is the kind of stuff we do all the time. We do strategize early, often six months ahead.”