4A's in Orlando: Looking for light at media conference

By Published on .

Most Popular
[Orlando] in the land of magic, media executives gathered at Walt Disney World for the American Association of Advertising Agencies media conference last week had yet to find the right tricks to correct a lackluster advertising market.

"It's quite cautious," said Robert Lilley, a veteran media agency executive and founder of independent consultancy Media Ventures. "There are still a lot of advertisers holding back money."

On the surface the TV scatter market-the near-term buying of commercial time in a particular quarterly period-has seen flat program pricing compared to the 2001 upfront. Media buyers and sellers have now turned their attention to marketing for the upcoming annual TV upfront where the bulk of TV time is purchased.

But most of this stability may be artificial, executives said. Walt Disney Co.'s ABC and News Corp.'s Fox, for instance, are both out of time to sell-due to audience delivery problems, started in September that require those networks to give advertising extra commercial units. Walt Disney Co.'s ABC under-delivered on its promised ratings by 20%, while News Corp.'s Fox under-delivered by approximately 15%. Only General Electric Co.'s NBC and Viacom's CBS are ready to deal in the first- and second-quarter scatter periods, and limited inventory is keeping program pricing to slightly above 2001 upfront pricing.

All this creates a mixed message. "It reminds me of a former client, Fred the Furrier, who said, `Business is great-I'm worried,'" said Erwin Ephron, a media consultant for Ephron, Papazian, Ephron.

Network and cable executives are naturally positioning a better market to come. "My mood is good," said Larry Goodman, president-advertising sales for AOL Time Warner's CNN and Headline News. "I'm making my first-quarter numbers."

better times

Some media-buying executives, though, also sense better times.

"The fact that the decline wasn't steeper is a positive thing," said Irwin Gotlieb, chairman-CEO, WPP Group's MindShare USA. "I'd rather be in a bottomed-out mode than a decline because at least when I think I've bottomed out, the other part of the `V' is coming." Mr. Gotlieb was referring to an economic chart that looks like a "V" where a plunge is followed by an upswing.

Could that upswing come during the upfront? That's unlikely. Executives said there will be no market-shaking swings in program prices like the huge percentage increases in 2000 and the corresponding decreases last year.

"There was a sellers' market and then a buyers' market-I think it will [end up] in the middle," said one veteran media agency executive. "You can almost call it a finesse market. It'll be a plus 2% [on the cost per thousand viewers] or a minus 2% market. But you are not going to see swings of plus 12% or minus 12%."

Some good signs in a return to normalcy have come in the amount of new business opportunities for agencies. Media reviews are significantly higher than in mid-2001, when the number of reviews slowed to a near-complete stop as marketers grappled with the economic chill.

"Companies were so worried about meeting their bottom lines, they didn't have time to move stuff around," said the executive. "Good pitches take 60 to 90 days to execute."

This year's annual event saw some 850 executives attend, about 150 less than last year. One reason for the decline: the Olympics, which had many media buyers heading to Utah. Others just opted to stay home.

A highlight of the 4A's event was an appearance by Barry Diller, CEO, USA Networks and soon to be chairman-CEO of Vivendi Universal Entertainment, who said the recent deal to merge all of Vivendi Universal entertainment divisions with USA Networks' cable channels gave the company new financial weight.

"When you put all these together you have scale to get to being a tier one media company," Mr. Diller said. "Now we have enough assets to get us the next assets."

Could one of those next assets be a network perhaps-maybe NBC?

Reached after the event, Mr. Diller said he didn't think one of the assets he's after would necessarily be a network. "You don't need it. But you'd like to have it." He added, "It's not a single asset."

In this article: