Movie Studios, Retailers Balk at 'Live Plus Three'

Upfront Deals to Be Tailored By Category, Night of the Week

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NEW YORK (AdAge.com) -- The upfront market, already moving at a glacial pace, is getting even cooler. Media buyers say some movie studios and retailers -- known for ads that urge consumers to take in a movie opening or attend a sale taking place in a few days -- are balking at the idea of paying for audiences who watch their ads several days after they air via use of a digital video recorder.
Studios are balking at paying for DVR viewers who might skip ads for blockbusters like 'Pirates of the Caribbean: At World's End.'
Studios are balking at paying for DVR viewers who might skip ads for blockbusters like 'Pirates of the Caribbean: At World's End.'

That's likely to cause the $9 billion marketplace for TV ad time to slow further as TV networks discover that different kinds of advertisers have different needs.

Day-specific message
"For the studios, the commercial message is timely. It has to be day-specific," says Jeff Robinson, senior VP-national television, Palisades Media Group, which handles buying for a number of movie studios. "That's the reason for the reluctance."

National and local spot TV saw a 16.9% increase in 2006, adding up to $379 million in spending by movie marketers, according to TNS Media Intelligence and the Television Advertising Bureau.

Any impasse would echo last year's market, when networks had a hard time cajoling marketers to loosen their purse strings for viewers who used DVRs to watch programs days or weeks later. Viewers use DVRs to skip past ads, most advertisers believe, and aren't worth paying for. The imbroglio delayed the upfront market and even caused some networks to leave dollars on the table.

This year, the two sides have begun to reach a consensus: In exchange for broadcasters agreeing to make use of Nielsen's commercial ratings, which offer viewership data for certain commercial breaks and are slated for release today, advertisers will consider paying for "live plus three," or viewers who watch ads -- and the programs they support -- as much as three days after they air.

That time frame doesn't suit everyone. For advertisers with time-sensitive messages "live plus three doesn't help," says Brian M. Kelly, exec VP-retail marketing, at Initiative.

Complicated deals
Some of these marketers could well end up accepting the live-plus-three idea, buyers say. And they believe networks may end up offering very complicated pacts that use live viewership for one part of a buy and other time frames for other parts of an upfront package.

Movie studios, for example, often run ads for a particular film several weeks before the movie opens, and those messages can be absorbed immediately or a few days later. Movie ads that air Thursday nights on big network programs are often designed to get people to attend a movie opening the next day, and so would be worth less if viewed even 48 hours later.

Some networks have already recognized they will have to be open to new types of negotiations. "We're ready to talk with you about any type of deal and we'll do our part to provide each of you with the best way to structure your package, reach your best consumer prospects, and grow your business," said Mike Shaw, ABC's president of sales, during the Walt Disney network's upfront presentation. NBC has also indicated it will be flexible in how it deals with advertisers.

No longer about 30 seconds
The networks may be eager to strike deals, but both sides can't avoid the intricacies that are now part of buying TV ads. Once centered primarily around the purchase of 30-second spots, TV advertising can now include the placement of products in programs as well as advertising on websites and digital extensions related to a particular TV show. The process has been further muddied by demands from advertisers for more granular measurement of the effectiveness of TV commercials.

"So much of it is new and complex that I think it's going to just take time to sort through the complexities," Initiative's Mr. Kelly said.
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