Recession, Strike Make for Grueling Selling Season

With Upfront Presentations Over, Broadcast Waits for Marketers to Make Their Move (but Will That Mean Money Goes to Cable First?)

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NEW YORK (AdAge.com) -- To say the nation's big broadcast networks have their work cut out for them this year would be an understatement.

ABC, CBS, NBC, Fox and the CW tried last week to persuade marketers to commit something close to $9 billion to their coming prime-time schedules -- even though their program development was gutted by the writers strike and remains threatened by a potential actors strike and current shows are watched less and less by an audience increasingly comfortable with digital media. And then there's that pesky faltering economy to worry about.

All that means advertisers are likely to take their time before putting their money down in this year's round of haggling.

"I don't expect there to be any kind of stampede or hurry," said John Swift, exec VP at Omnicom Group media-buying firm PHD. "There are more complex issues" advertisers want to consider when crafting TV deals, he said, such as attaching criteria to determine ad effectiveness and performance.

As each year's upfront market takes on a life of its own, buyers initially expect Fox, ABC and CBS to hold firm on pricing, while cable outlets, NBC and the CW -- the two broadcast networks with more severe programming and ratings issues -- likely will move quickly in attempts to bring in volume. Since NBC is hosting the Super Bowl this year, buyers said, the network is bound to get its fair share of early queries, and there is already chatter in the marketplace that the network has begun conversations with one of the larger buying firms.

Cable headstart
And while some networks are openly in talks about branded-entertainment deals -- one buyer said both NBC and Turner have engaged in these discussions for weeks, and NBC has been quite open about it -- pricing for many of them has yet to be locked down.

One of the issues this year is whether advertisers will place more money in cable before heading to broadcast. It's a gambit that has worked well in the past. In 2004, cable outlets including MTV Networks and Turner did brisk business early in the upfront market, goosed by buyers frustrated at the increases broadcast networks demanded in the cost of reaching 1,000 viewers, or CPM. Last week, Nickelodeon Kids and Family Group and Group M struck a more than $300 million deal, essentially starting the kids' upfront market.

"There's a very divergent view between sellers and buyers," said Peter Gardiner, chief media officer at Interpublic Group of Cos.' Deutsch. "We see a relatively soft prime-time marketplace and a relatively robust cable marketplace."

Marketers might try doing deals with cable in an attempt to set a price ceiling for their discussions with the broadcast networks. Both Turner and ESPN scheduled their presentations during the week traditionally dominated by the broadcasters. Even Spanish-language network Univision made a bold plea last week, noting that its ratings were up.

Meanwhile, buyers see Fox and ABC as the broadcasters that ought to be able to set the market, particularly because they have better-rated shows and seem most interested in engaging in substantial, detailed discussions with clients.

Platform buffet
Given all the issues at hand this year, it's no wonder network presentations have begun to evolve. After debuting its programming schedule in April, NBC opted to run media buyers, journalists and clients through an expo of its media assets, with an array of TV screens and flashing lights that late-night host Conan O'Brien dubbed "the epilepsy hut."

CBS employed Rachael Ray, Adam Carolla and Craig Ferguson to tell buyers about the company's syndication, radio and outdoor options. ABC opted for a muted affair, unveiling only two new fall shows and hinting at a few midseason replacements. The CW presented a schedule that included a remake of "Beverly Hills 90210" and other fare that seemed to fit right in with hit "Gossip Girl," but a decision to let a third-party studio program Sunday nights doesn't bode well for the ratings-challenged network.

Only Fox remained unapologetic about the medium. "While some of the other networks are focusing a lot on ancillary platforms in order to salvage their programming, at Fox we really believe the better our programs perform on the network, the better it's going to be on all platforms," said Peter Liguori, the network's chairman-entertainment.

Cognizant of media shifts and economic fears, many networks touted various plans to help marketers better use their air, turning mass-reach TV into a more targeted tool.

Innovation
ABC unveiled what it called an advertising value index, which lets marketers craft a series of trackable measures ranging from consumer-recall data from Nielsen's IAG to commercial-ratings metrics. ABC and cable sibling ESPN revealed plans to launch an "emerging media and advertising research lab" in conjunction with Australian professor Duane Varan, who has spent the past several years testing how TV viewers react to interactive TV, split screens, sponsorships, product placements and the like.

Turner offered a new technique that would help advertisers run commercials adjacent to scenes in movies and programs that feature particular products -- so a coffee maker might run an ad near a scene in which actors sip java.

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Contributing: Andrew Hampp
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