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TV Upfront Takes Its Baby Steps

Jun 9, 2007  •  Post A Comment

Media buyers showed some of their cards to the broadcast networks as television’s upfront advertising market began to stir last week.
“The dancers are slowly entering the dance hall,” said John Miles, director of investments at MediaCom, adding that it is still early and “It’s tough to get a full picture.”
The market got off to a sluggish start as the industry waited to absorb new ratings information from the Nielsen Co. that measures how many people watch the commercials within a program.
The ratings also count people who watch the commercials after they air using digital video recorders. With ratings covering same day, one, two, three and seven days’ worth of playback, the math has become considerably more complex.
Most agencies sent some of their clients’ budgets to the networks last week, two weeks after the networks presented their fall pilots to advertisers.
The budgets, which say how much clients plan to spend and what shows they want spots to appear in, are becoming increasingly complex because they now also cover other aspects of a media buy, including product placement and digital extensions.
As in recent years, buyers moved first with top-rated Fox and ABC, though the other networks also received some attention from the agencies.
Agencies representing movie studios, which want prime space on Thursday nights, are usually the most eager to make quick deals.
Buyers said submitting budgets wasn’t a signal that they are in a rush to begin negotiations. They said that until they see the networks’ responses — how many commercials their clients’ money will buy — they won’t be able to see how the new ratings data is affecting ad prices.
After getting small increases in terms of cost per thousand viewers in last year’s upfront and with the scatter ad market being strong for networks, broadcasters are expected to be aggressive in pricing. That may particularly hold true if the networks think commercial ratings measurements reflect a lower number of eyeballs watching the shows they air.
Cable Gets Complicated
Buyers think television spending will be flat as online advertising draws more spending. They will be reviewing plans to see how much of any increase the networks seek is attributable to the change in ratings-measurement currency, and how much is price inflation.
While buyers took longer than usual to begin to submit plans to the networks, they were told to expect a tortoise-like turnaround time on the plans.
Because of the newness of the multiple ratings-data streams, the networks have multiple sets of eyes reviewing each plan before it is sent back to the agencies and advertisers.
While most of the activity appeared to be happening with the broadcast networks, some cable networks were also getting into the upfront game.
But the picture for cable is much more complicated. While all of the broadcast networks are ready to work on the basis of commercial ratings that include some DVR playback, many cable networks, including MTV Networks, are still holding out to negotiate based on program ratings, as in the past.
Nielsen had problems generating commercial ratings for cable and delivered numbers later than expected for the networks to examine. Some cable executives think it’s too soon to base ad buys on a measurement that hasn’t been fully vetted. Others are concerned that the large difference between program ratings and commercial ratings on some cable networks will reduce their ad revenue.
Some agencies are also not yet completely comfortable with the commercial ratings for cable and are talking about doing some deals based on commercial ratings to appease clients who want more accountability and to gain experience with the new metrics.

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