A different upfront
This year's TV upfront has already emerged as something different to its past incarnations, with media companies touting so much digital media that "TV" doesn't seem big enough a word to encompass it. But the decision by J&J not to spend any of its $500 million marketing budget during the upfront, first revealed by The Wall Street Journal, underscores the increasing shift away from marketers committing dollars during May and toward a more year-round buying cycle.
"We're going to move from a broadcast year to a calendar year to bring the process into alignment with our budgeting and planning timelines used by our brands," a spokesman for J&J said. "Basically that means [our negotiations] would be more of a September time frame."
Many marketers have said they would like to do the same. For most, the upfront buying period doesn't necessarily coincide with their business-planning cycle. At the ANA TV Forum in March, an overwhelming 83% of marketers present wished the upfront moved to a calendar-year schedule.
Nevertheless, few have felt they could make such a move before, fearing that it would leave them without the prime-time spots on which many rely heavily to communicate their messages. J&J's confidence that it can wait until later in the year to commit seems to be another effect of proliferating advertising options and marketers' increased desire for precise and efficient spending.
Coca-Cola is also playing a cagier game than usual. It is sending a number of key personnel to the networks presentations, said Susan McDermott, a company spokeswoman. But it isn't committing to buying significant packages of time during the upfront itself. Coca-Cola spent some $190 million on network commercials last year, according to TNS Media Intelligence.
In the past year marketers have talked about holding money out of the upfront to spend on digital opportunities throughout the year. Randy Falco, president of NBC Universal Television Networks Group, said there's been "lots of talking about holding money back for digital opportunities throughout the year. ... We're not sure the upfront market will be a good indicator of the ad market."
Soft scatter market
During a so-called normal year, buying TV time in the upfront would offer a discount over buying time throughout the year, during the scatter market. However, the soft scatter market of late makes it more economically viable for brands to buy TV time throughout the year. The soft scatter market signals marketers' moves to other, better-measured and more easily tracked media.
J&J has put a new marketing services team in place since last fall, triggered by the retirement of Corporate VP-global advertising Andrea Alstrup, which took effect in February. The new team includes Kim Kadlec, VP-global media, and Joe McCarthy, VP-global advertising. Ms. Kadlec, who was previously VP-branded entertainment at NBC Universal, was a former executive with Interpublic Group of Cos.' Universal McCann, which, along with Omnicom Group's OMD, both New York, handle media buying for J&J in the U.S.
The new team has already shaken things up, including adding new agencies to the roster, such as WPP Group's Ogilvy & Mather Worldwide to back the company's sponsorship of the 2008 Olympic Games. They are also increasing the company's emphasis on nontraditional media.
20% shift to nontraditional media
According to people who have spoken with J&J executives, the company plans to shift more of its marketing spending to nontraditional media -- 20% or more of the budget, according to one of the executives. The J&J spokesman declined to comment on that, but said: "As the media landscape changes and consumers adopt new media technologies, we do recognize the need to adopt new media communications strategies to connect with our customers. With that in mind we're working with our partners in broadcasting and advertising to help develop these new approaches. And it's really important that all of our communications both online and offline are seamless. And we're working with our partners to synchronize our messaging across media."
One cable executive said J&J typically buys cable on a calendar-year basis so this move is likely bringing its broadcast buying more closely in line with what it does with cable. The timing of its decision to skip the network upfront sends a message to broadcasters and is indicative of the power shift within the broadcast TV-buying market.