Following the prime-time broadcast upfront, in which buyers negotiate bulk hold orders for advertising time on broadcast and cable networks for the fall TV season, the buyers now must pitch their clients, the advertisers, to agree to spend the money the buyers have already pledged to the networks. It's a ritual that goes on every year, a "dog-and-pony show," that usually ends up late in August when the holds either go to order or drop out. Sometimes it even takes longer.
"It can last as long as you set up all your meetings and get all your ducks in a row," says Marc Goldstein, president-CEO of WPP Group's MindShare North America. "The more clients you have the longer it takes."
`WHAT DROVE DEMAND?'
This year, buyers have some explaining to do. A total of $9.4 billion was committed, and rate increases are up as high as 15%. Most marketers have not seen revenue increases in their own businesses anywhere near what the networks are getting.
"The difficult part is benchmarking the upfront against the economy," says one a top media agency buyer who requested anonymity. "There is nothing else in the economy that is exhibiting the kind of strength that the national media is exhibiting right now. That's the toughest thing for clients to understand: What drove the demand?"
In fact, some agency executives say advertisers themselves helped drive the demand because they significantly increased their advertising budgets this year.
"The money was out there," says another media buyer who spoke anonymously. "And the networks knew it."
So the question remains: Will the holds go to order? Two years ago, when the stock market dropped, marketers responded by cutting their ad spending and many holds dropped out. But buyers don't expect that this year.
An informal poll of media agency buyers suggests that about 95% or more of the commitments will go to order this year, despite earlier, pre-upfront, prognostications that a fallout was likely because of high prices, and movement of ad dollars away from TV to other media.
"Our stuff is all holding strong," says John Gaffney, chief operating officer of Havas' Media Planning Group, echoing the response of most media buyers contacted. "We're not seeing any backing down from commitments."
"For the most part, things will hold," says Tim Spengler, exec VP-national broadcast for Initiative Media, New York, a unit of Interpublic Group of Cos. "There will be some spillage but not much."
"The only way stuff will slip off the table is if there is a significant change in the client's needs," says John Muszynski, exec VP-chief broadcast investment officer at Publicis Groupe's Starcom. "What you take to the marketplace is what should go to hold and should go to order, unless there is some unforeseen problem. The timing between going from hold to order should not be a time to manipulate schedules to improve your situation. I've always felt a hold is tantamount to an order. I consider holds sacred."
Rick Sirvaitis, president-chief operating officer of Interpublic Group of Cos.' GM Planworks, echoed others, however, saying it's too early to tell yet how much will hold and what will drop. "Meetings with clients are just getting started, and they continue through August. We won't really know anything until then."
The success of the entire process rests with the agency, said media agency executives. "It all depends on what you told your client before entering the marketplace," says one top buyer. "If you led them to believe that this was going to be a strong market and there was a likelihood of paying double-digit increases, then what they see may not blow them away. But if you said you don't see a reason for a double-digit increase in the marketplace and you walk in with double-digit numbers, then it will be a tougher sell, because you're not delivering on the level of expectation."
contributing: wayne friedman