|Photo: Darryl Estrine|
|From left: NBC's Keith Turner, ABC's Mike Shaw, CBS's Jo Ann Ross, CW's Bill Morningstar, Fox's Jon Nesvig and MyNetworkTV's Bob Cesa. Click to see larger photo.
Digital media impact
With more uncertainty surrounding this upfront than any in decades, the one thing that's clear is that the new player at the negotiating table --digital media -- is shifting the finely tuned social and psychological balance. While there's still some chest-beating about the best programming lineups, this year each of the five networks is making just as much noise about its digital ventures.
Just one problem: No one knows whether those new packages can push the market over last year's $9.1 billion mark.
So much ambiguity
In his 26-year career, Starcom CEO John Muszynski -- whose agency controls $8.5 billion in media spending annually -- has never seen so much ambiguity about budgets this close to upfront time. And his market intelligence from buy to sell side suggests he's not the only one scratching his head.
Traditional TV buyers, together with their digital counterparts, have been charged with shadowing consumers as they hop between the remote and the mouse, but will they actually spend big on digital during the upfront? Some say that depends whether the big ideas are there, but most seem to agree that -- for this year at least -- the digital plays will largely remain the frites to the steak of the prime-time broadcast negotiations.
In other words, while buyers and sellers both know that advertisers are going to expect more multiscreen opportunities, they also know that the majority of the budget that is earmarked in the month of May is going to be spent on TV time.
ABC's aggressive stand
Without a major influx of digital dollars, most estimates suggest the broadcast market will be flat to slightly down. If that's the case, networks will only make gains at the expense of their rivals. One expected to be doing the gaining: ABC's President-Sales and Marketing Mike Shaw, who's primed to be more aggressive on pricing, looking for CPM increases upward of 6%. The network has already been approached to do early deals.
Fox is also said to be in good shape, tying ABC for the largest number of 18- to 49-year-old viewers through week 32. CBS is solid on pricing on 25- to 54-year-olds and is expected to come in the middle of the pack. It is already out shopping Super Bowl 2007. NBC will again be under pressure from buyers, and has fewer ratings points to sell. The network is down three-tenths of a rating point compared to last year (3.3 vs. 3.6, in the 18-49 demo) and 4.27 million viewers against 4.63 million at the same point last year. CW is an unknown at this stage.
All of the broadcasters have tripped over themselves in the last month to get out their digital offerings. Just last week, CBS unveiled its broadband channel, Innertube. NBC is going to market with a "TV 360" platform, and CEO Jeff Zucker declared all programming "has to have a broadband component or a mobile application." ABC just kicked off a month-long test of streaming its prime-time hits on ABC.com, and Fox is selling Gen Fox (including MySpace.com) as a way to reach 12- to 24-year-olds.
Fully briefed on TheCWTV.com
To give some idea how important the digital element has become, buyers report that while they're in the dark on what new network the CW, formed by merging the WB and UPN, will do about pricing or even what its launch date is, they're fully briefed on the network's online plans for TheCWTV.com, currently being constructed.
"Advertisers are looking at 360 ways of engaging an audience and so are we," said Larry Kramer, CBS digital president, during the unveiling of Innertube. "This is an era of ideas, a moment in history where advertisers and programmers have come together with ideas about ways to do everything."
If the networks have the right new-media ideas, the prize is potentially huge: Internet ad spending was some $12.5 billion in 2005. If they don't: Hello Yahoo, hello YouTube.
So all this Web activity has the potential to make the 2005-2006 upfront look very different from before, if only because so many moving parts will slow down upfront ad deals and leave network sales execs wondering why their commissions are still tied to the number of 30-second spots they sell.
"All the agency-side execs are saying they'll hold back money to take advantage of new things that pop up," said Bob Cesa, who sells syndication, DirecTV and now News Corps.' My Network TV.
Three factors to watch
"There are three factors to watch," Mr. Muszynski said. "Is there less money because budgets are down, or because money is shifting to digital media, or because money is being held out for scatter?"
Mr. Shaw warns that the broadband offerings aren't scalable yet. He reminds marketers to think of "that family of four who earns $50,000 a year. We want to talk about what's new and cool, but it doesn't mean it will move a product." Even he's scratching his head trying to estimate how ABC's broadband plays can be monetized.
The upfront panels of recent weeks have crystallized feelings among some buyers that the "million little pieces," approach might be the way to go. "Everybody feels we should be testing online," said Gary Carr, senior VP-director of broadcast services at independent agency TargetCast. "Maybe it's true. You should be jumping on things that make sense, even if you're buying 200 different elements rather than one network."
One senior media buyer, MindShare's national broadcast president, Jason Maltby, isn't swallowing the upfront-revolution story just yet. "The real tipping point will not be dictated by advertisers, but consumers," he said. "Penetration does not equal usage."