MediaWorks Viewpoint: Before You Buy, an Upfront Checklist

Gene DeWitt: This Marketplace Will Be the Most Challenging in 30 Years

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The toughest upfront ever? A perfect storm for media buyers? Caveat emptor! Let me count the ways that
Gene DeWitt is CEO of DeWitt Media Strategies. | ALSO: Comment on this viewpoint in the 'Your Opinion' box below.
Gene DeWitt is CEO of DeWitt Media Strategies. | ALSO: Comment on this viewpoint in the 'Your Opinion' box below.
the 2007-08 upfront national TV media-buying marketplace may be the most challenging in 30 years.

1. Declining network ratings have depressed the supply of audience available to sell to advertisers.

2. Strong demand for national TV ad time follows several quarters of strong scatter sales.

3. Inflationary trends in the general economy, as both advertisers and the networks discover pricing power that has been unseen for quite some time.

4. The "currency" in which ad time is measured is in question on two fronts: The networks must include delayed viewing via DVRs in the ratings they sell or face a dramatic and unacceptable further decline in their advertising "inventory."

5. A confusing surrogate for commercial ratings is being offered by Nielsen for the first time this year and there's definitely less here than meets the eye.

6. There is a tremendous ratings gap between the few highly rated hit shows and the great majority of programs that deliver ratings but are simply not prime no matter when they air.

7. The disappearance of negotiating clout as the consolidation of mega advertisers and mega media buyers makes it impossible to walk away from the networks' offerings.

8. The industry's fascination with "new" media, which to a very large extent are simply new platforms for existing TV content but which command much higher ad prices than their audiences would seem to merit.

What to do? Prepare carefully for the upfront. Below is a checklist of questions to consider before you buy. Incorporate a certain amount of agility and flexibility in your buying strategies so that if faced with excessive pricing in one area the buyers can hold back dollars or move to other dayparts rather than falling on the sword of network inflation.

Remember that there are always alternatives to the traditional upfront (quarterly scatter, last-minute opportunistic, calendar upfronts), to broadcast network TV (cable, syndication, streaming video, spot television, unwired networks) and to TV in general. The bottom line: Explore all of your options thoroughly before making large, long-term commitments in the upfront. Have a plan B in your pocket in case your initial strategies hit a wall.

Caveat emptor.

UPFRONT CHECKLIST
Ten Things to Think About While Formulating Upfront Buying Strategies

  1. How much to allocate to the various markets and why
    > Broadcast Upfront
    > Quarterly Scatter
    > Opportunistic
    > Calendar Upfront
  2. How much to allocate to broadcast vs. cable and why
  3. Pricing: The budgeted costs per rating point and why?
  4. Response options if costs are higher than expected
  5. Programming triage, i.e., what is the acceptable distribution of the buy among:
    > High-rated, average-rated and low-rated programming?
    > Original vs. repeat programming?
    > New shows, returning shows in the same time periods and returning shows in new time periods?
  6. How does each network's CPM guarantee compare with the buyer's estimates of actual audience delivery for each proposal? Have the network and buyer built a excess of probable makegoods into their plans?
  7. Are any of the DVR rating measures acceptable for inclusion in the buy? Or only live ratings?
  8. Are digital extensions such as streaming video to be sought and, if so, in what way will they be evaluated?
  9. How should Nielsen's new commercial-ratings figures be incorporated into the buys, if at all?
  10. Is there a strategy for negotiating commercial position within pods, e.g., the first or last commercial in a pod?
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