Report From ANA Annual TV Forum

ANA TAKES SERIOUS AIM AT TV UPFRONT MARKET SYSTEM

Ad Buyers and Sellers Clash Over Ratings Measurements

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NEW YORK (AdAge.com) -- As it released documentation showing that 56.6% of marketers are dissatisfied with the upfront ad-buying system, the Association of National
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Advertisers today unveiled a new effort to change that system.

In a surprise announcement at the ANA's annual Television Advertising Forum at the Mariott Marquis here, president-CEO Bob Liodice said the organization will launch an examination of the ways the upfront can be altered to better reflect the realities of today's media landscape.

'Unfair network pricing'
The upfront refers to the freewheeling auction that takes place each spring as the TV broadcast networks try to sell between 75% and 80% of their commercial airtime ahead (or "upfront") of the new fall TV season.

Mr. Liodice also pointed out that a new ANA study found that 47% of marketers believe the current network advertising pricing supported by the unfront is unfair.

The study surveyed 165 members of the ANA, the largest sample ever conducted by the group. The trade group represents more than 300 companies that market more than 8,000 consumer and business brands throughout the U.S. Its members collectively spend more than $100 billion a year for advertising and other forms of marketing communications.

Measuring ad watchers
The study also said 85% of the marketers surveyed would like to see the audience measurement standard changed from how many people are watching TV programs to how many people are watching commercials.

The annual gathering in midtown Manhattan began with a spirited debate between advertising buyers and sellers in front of a standing room-only audience of marketing, advertising and TV executives.

Betting on ad time
"A lot of the upfront has to be viewed as a financial play," said Marc Goldstein, president-CEO of WPP Group's MindShare North America. "It used to be that [television] programming brought us in to the upfront. At the Stock Exchange, traders bet on the economic future, and that's what we are doing at the upfront, betting on the future of advertising time on television."

The discussion flowed around various issues, including stopping upfront negotiations at a certain hour. "There should be a closing bell, just like the stock market," suggested David Verklin, CEO of Aegis Group's Carat North America.

John Nesvig, president of sales at Fox Broadcasting, jokingly suggested that ad buyers wouldn't have to work so late if they didn't wait till the end of the day to cut deals. "You guys have a few drinks with the client, you talk about it, then at the last minute you make a decision."

Heated debate
One of the most heated topics was that of minute-by-minute or commercial ratings. Mr. Goldstein said his agency was interested in Nielsen Media Research changing its audience-ratings standard to commercial ratings.

"I want to know that what I'm paying for is what I'm getting," he said.

Mike Shaw, president of sales and marketing at the ABC television network, pointed out that networks -- the ones paying 85% of Nielsen's bills -- are interested only in program ratings.

'Program-delivery business'
"We are in the program-delivery business, not the commercial-delivery business," Mr. Shaw said.

His comment was much discussed among conference attendees between sessions. One top marketing executive said, "I was shocked to hear him say that. He may be paying Nielsen's bills, but we are paying his. He better deliver commercial ratings."

Mr. Nesvig, on the other hand, was not as confrontational. "Certainly, we are in the commercial delivery service," he said.

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