The arrival of a new ratings system is an issue that hangs over any discussion of this year’s upfront.
Some form of measurement of how many people are watching commercials is likely to be used by many buyers and sellers, creating advantages for some and difficulties for others.
“I think everyone’s looking at how to create opportunity,” said Pam Zucker, senior VP, marketplace ignition, MediaVest USA. “There are so many variables that, if you’re smart and strategic, you can find opportunities where others don’t know to look.”
With different advertisers and marketers looking at new numbers in new ways, “There’s not going to be one size fits all, that’s for sure,” said Mike Shaw, president of sales and marketing for ABC Television Network.
Ms. Zucker and Mr. Shaw are two of the key executives who will be featured at the TelevisionWeek-Advertising Age Upfront Television Advertising Summit April 11 in New York.
Other speakers set to bat around the issues surrounding this year’s market — engagement, digital extensions, viewer retention and more — include Amy Carney, executive VP, advertiser sales, Sony Pictures Television; Ed Erhardt, president, customer marketing and sales, ESPN; David Marans, executive VP, IAG Research; Sara Erichson, general manager, national services, Nielsen Media Research; Andy Donchin, director of national broadcast for Carat; Michael Kleha, director, media services, Merck & Co.; Linda Yaccarino, executive VP, sales and marketing, Turner Entertainment; Michael Teicher, executive VP, media sales, Warner Bros. Television Group; and Donna Campanella, executive director of global media, global insights and marketing intelligence for Avon Products.
The keynote speaker is Roger Adams, senior VP-chief marketing officer of Home Depot.
Last year there was much talk about advertisers choosing to spend less of their TV money during the upfront, or opting out of the upfront altogether. The primetime upfront finished down about 1 percent at $8.4 billion, but the decline was largely due to the folding of the WB and UPN into The CW and the failure of MyNetworkTV to attract ad dollars.
Mr. Shaw expects less of that talk this year. With prices up in the scatter market, “Those that bought in the upfront are pretty happy they did, and those that didn’t aren’t really talking about why they didn’t, are they?”
Merrill Lynch analyst Jessica Reif Cohen cited the strong scatter market as one reason for her forecast that this year’s upfront will be up 3 percent to $8.7 billion in broadcast prime time and up 3 percent for cable and syndication.
But before any deals can be done, buyers and sellers have to come to an agreement on the ratings system, which could be tricky. Last year the whole upfront was delayed when buyers refused to buy ads based on program ratings that included shows played back on digital video recorders.
Ms. Zucker said discussions appear less confrontational this year. “With the opportunity to have average commercial ratings, it totally changes the conversation,” she said. “I think there’s a fair way to evaluate things now.”
Although ratings for individual commercials would be preferable, Ms. Zucker said her agency is prepared for now to use the numbers Nielsen Media Research is generating for the average of all of the commercials in a show. She expects advertisers who want to buy only “live” commercials without DVR playback will buy based on program ratings, while other advertisers will use average commercial minutes, plus some playback.
“The question is, what’s the plus,” she said, referring to Nielsen’s data streams of live plus same-day playback, live plus one-day, live plus two-day and live plus three-day.
Ms. Zucker would like the industry to unite on a single stream, but Mr. Shaw considers that unlikely. “I don’t think there’s any chance the marketplace will coalesce around one metric to use,” he said.
A bigger question is how the new ratings will affect the price of ads. Will advertisers pay less for a commercial unit next year when commercial ratings show fewer viewers than program ratings did last year?
“I think the CPM should stay flat and the unit pricing should go down,” Ms. Zucker said. “I buy audiences. I don’t buy units.”
Not surprisingly, Mr. Shaw has the opposite point of view. He said unit rates were negotiated in last year’s upfront. “I think it’s fair to view the unit rates as the constant, because that’s the deal we already agreed on this year,” he said. “A new CPM should be calculated based on the new rating metric the buyer wants to use.”
Ultimately, Ms. Zucker said, supply and demand will sort things out.
Mr. Shaw said commercial ratings will lead to a big change in where ad money is spent. “I would suggest that advertisers are going to reward and support to a larger degree those video suppliers whose commercial index is higher and closer to their program ratings,” he said. “That benefits ABC and the [other broadcast] networks.”
But while commercial ratings could be scary to some cable networks facing a loss of 10 percent or more of their impressions, depending on what new measurement system is used, Ms. Yaccarino of Turner said they also could create opportunities.
“We’re just working more closely than ever with our clients, especially this time of year, and most certainly not waiting for the commercial minute data to come out during upfront week,” she said.
Those conversations look to mesh marketers’ goals with Turner’s branded networks, TNT, TBS and Court TV, and seek unique ways to tie them together by creating programs that extend beyond spot buys and include multiplatform extensions online or with mobile.
“It’s accepted that the viewing experience on linear television is only enhanced by the unique experience you can deliver or enhance with your broadband or your wireless,” Ms. Yaccarino said.
Last year, one Turner network did a deal with Chase that involved a mini-drama that appeared on TNT and online. “We were very much in development and in fact in production before the upfront,” Ms. Yaccarino said.
Deals made early give the network a line on how much money is coming in for the upfront and guarantees the advertiser “a pretty darn [good] custom partnership,” she said. “Once they lay in big events like that, then they can go to the upfront and kind of do their bulk buying.”
With commercial ratings on the horizon, Turner also is looking at ways to minimize tune-out during breaks.
“We have a lot of testing going on, because we certainly don’t want to be the networks that come out with gimmicks,” Ms. Yaccarino said.
One thing the network did last year was to gather funny commercials in a pod on TBS, the “very funny” network. The stunt was promoted with ads that promised viewers, if you like funny programming, you’ll like the upcoming funny commercials.
The spots also appeared on Turner’s veryfunnyads.com Web site, where viewers could watch them and email them to friends. “We have really successful data that shows it worked, with higher recall,” she said. “You’ll see more of that.”
Digital also is likely to be a bigger part of this year’s upfront.
Mr. Erhardt of ESPN said digital is “an important part of our business, and it’s a big part of our overall approach.”
ESPN figures it is competing for a bigger pie of advertising dollars by offering advertising in media that go beyond traditional television.
ESPN’s sales staff is organized into client and agency teams that include a television exec, an Internet exec, and a magazine exec and a radio exec, all of whom report to a multimedia sales manager.
“We’re busy now putting together multimedia deals that have significant Internet digital video assets as well as print, television promotion and marketing,” he said.
Syndicators stress that commercial ratings will point to the low clutter and high live tune-in for their shows.
“The good news is that it looks as if syndication tends to benefit more in the early data,” said Ms. Carney of Sony Television. “Before diverting money to less proven media and overlooking syndication, stop
. It all exists right there. That has consistently been our message. It’s even more important this year because of commercial ratings and TiVo.”
Warner Bros. Television, which is introducing the new show “TMZ” and the off-network sitcom “Two and a Half Men” to advertisers at this upfront, also is addressing the issue of engagement.
“We spent a lot of money on both syndicated and primary research to demonstrate that our viewers are engaged in our programs,” Mr. Teicher said. “In addition, we are utilizing some custom research to demonstrate how brands interact with our shows, from both a loyalty and a product-usage standpoint, that’s resonating with planners and clients.”
Mr. Teicher is responsible for selling all Warner Bros. content across all distribution platforms. That includes commercials, branded entertainment and various digital extensions.
He said the Web sites for “Ellen,” “Tyra” and “Extra” attract more women than men, and women are harder to reach online; that’s different from television, where they are easier to reach.
“To string those together is a meaningful footprint for advertisers who want to do business online,” Mr. Teicher said.