Upfront works, but it may be ripe for change

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The college basketball season culminates with a national tournament, otherwise known as "March Madness," which grips the country. The advertising world has its own version of March Madness: "June Madness," or the "Upfront"-the annual mating rite that takes place between the sellers and buyers of network TV commercials.

June Madness comes some time after the last of the seven broadcast TV networks presents its new program schedule to the advertising industry's elite. The program schedule presentations take place during May and with great pomp and circumstance, followed by drink, food and the proverbial rubbing of elbows with actors from many of the TV shows. Then a few weeks pass until, mysteriously, someone (and it could be a different "someone" each year) says, "I am ready-let's do it." And everyone (and I mean "everyone") says, "I'm ready, too!"

Then all of the advertising buyers around the U.S. "go to the mattresses" with their computer-generated share estimates-and no one gets any sleep for the next 72 hours as they finalize the negotiation of the better part of $8,000,000,000 (yes, that is eight billion dollars) in network advertising buys.

Of course, the upfront can't take place before there is the requisite amount of posturing in the trade press by people on both sides of the desk-egged on by the trade press.

The buyers inevitably claim the money that was spent on network TV advertising time in last year's upfront won't be there this year. The sellers say something like, "Ha! What do you know? Remember the dear departed dot-com companies of a few years ago and all of the money they spent. There is always someone new to come in and fill the void. And if there isn't anyone new on the horizon, we can always embark on a new strategy to maintain or increase unit pricing by holding back inventory to make certain that the supply isn't enough to meet whatever demand exists."

I keep wondering whether those enlightened folks who sit on the Federal Communications Commission still think that encouraging media ownership consolidation is a good idea after they read some of the comments made by the media owners that have been helped by the FCC's rulings.

Now far be it for me to suggest that the upfront is lunacy. After all, we have done business this way for years-and if it ain't broke, why fix it? Doesn't everyone win?

* The networks get purchase commitments from advertisers for about 75% of their commercial time.

* The advertisers get price protection, audience guarantees, an opportunity to get first crack at selecting programs and options to cancel their commitments.

* The media buyers get to manage their manpower. Just think how many more people would be needed if they had to buy their clients' advertising needs weekly rather than in one night.

In truth, the reality is that in nine out of 10 years the advertisers who "went upfront" did much better than the advertisers who waited and bought network advertising time in the traditionally more expensive "scatter marketplace." So are there any reasons to change what has been (according to a number of my ad-buying colleagues, at least) a very successful process where all parties win?

I think there are, and I offer the following observations.

* Spending $8 billion at 3 a.m. (or some other such ungodly hour) seems more like something we would see as a stunt on TV's "Survivor" or "Boot Camp" than a sound business practice.

* The upfront's traditional process, in any event, has been evolving into something different. More and more buyers are meeting with the sellers in something called the "pre-upfront," and are conducting their negotiations in a more disciplined fashion.

* Many advertisers have to create phony budgets for at least the last three months of the broadcast year since their fiscal year does not match up with the broadcast year.

* And, because a number of prime-time programs don't make it into the new calendar year, the advantage of selecting programs in June for the upcoming year has marginal value at best.

At the risk of taking the "fun" out of the business, I would like to propose an alternative that could improve the process for all.

What if the upfront changed its name and became an "annual purchase"?

And what if the "annual purchase" was made three months prior to the start of each client's fiscal year? What would happen?

First, advertisers would have a much more realistic idea of what their annual spending is likely to be-which should result in fewer cancellation options being exercised.

More advertisers would likely be in a position to commit dollars on an annual basis.

The whole process could be managed by buyers and sellers in a more thoughtful, disciplined and professional manner.

Every advertiser, no matter how large, would get the appropriate attention it deserves from both the media buyers and media sellers.

And, finally, the ridiculous posturing that goes on from both sides of the desk would come to an end.

I certainly don't want to take the fun out of our business. Just the "madness."

Mr. Banks is exec VP-executive media director, Publicis Groupe's Saatchi & Saatchi North America, New York.

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