Upfront Market Showing Life

Jun 5, 2006  •  Post A Comment

Television’s stalled upfront advertising market showed signs of movement late last week, with media buyers sending clients’ spending plans to the networks, a key step in the negotiating process.

Real discussions on price, however, remained on hold because ad buyers don’t want to pay full price for viewers watching shows on digital video recorders after they air on the networks.

That meant that two weeks after the networks presented their fall schedules, no large deals could be completed. Last year some networks and agencies made deals the week of the presentations.

Whether the delay works to the advantage of advertisers or networks remains to be seen. The slower pace in part reflects changes in the television business, where TV executives and buyers are learning to navigate the complexities of deals that include product integration and new forms of distribution, including delivery over the Internet and cellphones.

In addition to talking, buyers are presenting spending plans for some of their clients to selected networks, one network executive confirmed. Those budgets enable the networks to get a sense of market demand after months of posturing. The networks can also devise proposed advertising schedules for those clients, indicating in which shows their spots will air.

Some buyers said they think the delay works to their advantage as pressure mounts on the networks to lock in deals. Economic news, such as a report of lower auto sales in May, shouldn’t give network executives reason for reassurance, one buyer said.

A veteran ad sales executive said he expects the pace of the market to pick up this week, with some broadcast deals getting done. Negotiations over new elements of TV ad deals, such as digital forms of distribution, will prevent a crush of business from getting done anytime soon, he said.

In the continuing dispute over how DVR use should be calculated in ad deals, buyers said it’s unlikely that there will be any solution other than using the same “live” ratings that have been used in the past. Networks still are holding out for deals to be based on live viewers plus those who tune in via DVR the same day. That position represents a retreat from the networks’ original position, championed by ABC. The networks had argued that advertising prices should be calculated based on live viewers plus those who watch a show on DVR up to seven days after it aired.

Whatever happens this year, buyers are eyeing some form of ratings for commercials to be used for the 2007-08 season.