MTV EXEC WANTS UPFRONT OVERHAULED

Ad Sales Execs Mull Problems and Solutions

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NEW YORK (AdAge.com) -- Executives responsible for selling advertising on their media properties offered their insights

Photo: Hoag Levins
The panel of ad sales media executives.
in how to fix current buying models while discussing the ebbs and flows facing their industries at a panel today at the AdWatch: Outlook 2002 event.

Mark Rosenthal, president and chief operating officer of MTV Networks, said the cable upfront has reached a partial stalemate because general entertainment cable networks are trying desperately to secure pricing increases while buyers are looking to recoup some of their losses from the broadcast market. The broadcast upfront saw pricing jumps at all six networks and total dollars rise to an estimated $8.1 billion range, up $1.3 billion from last year.

Network holdouts
Those general entertainment networks are "holding out for higher prices than the agencies are willing to pay," Mr. Rosenthal said.

Cable networks that are "red hot" in the cable upfront are those targeting younger demographics, such as his Viacom-owned MTV Networks group, which operates a slew of those young-skewing properties including MTV, Nickelodeon and TNN, formerly a general entertainment outlet that has tried to reposition itself as a hub targeting young males.

Mr. Rosenthal was part of a panel today at the at the AdWatch: Outlook 2002 conference, co-sponsored by UBS Warburg, Taylor Nelson Sofres' CMR and Advertising Age. The discussion was moderated by UBS Warburg analyst Christopher Dixon and included Daniel Brewster, president-CEO Gruner & Jahr USA Publishing; Ted Leonsis, vice chairman of America Online; and Janet Robinson, senior vice president of newspaper operations for The New York Times Co. and president and general manager of The New York Times.

New type of upfront
Mr. Rosenthal suggested changes to how the upfront season works. Instead of a selling period started by broadcast and followed by cable and syndication, he suggested the upfront should be divided into demographic marketplaces: a 12- to 24-year-old category in which cable networks such as Nickelodeon and Cartoon Network would compete with some broadcast properties, or an 18 to 49 bracket where MTV would go head-to-head with NBC. (Such upfronts might perhaps favor Mr. Rosenthal's Viacom outlets, which offer clearly defined targets.)

One top agency executive who did not attend the discussion said of the suggestion: "It's interesting. I'm not sure I buy it. But I will tell you this: I'm certainly of a mind that doing something different has to happen."

G&J's Mr. Brewster said the magazine industry was still recovering from the recent recession and other pitfalls. "Right now, we're under tremendous margin pressure," he said, pointing to the escalating costs of acquiring subscribers and increasing postal rates.

Change magazine distribution
He also said the business' single-copy distribution channel is flawed, as distributors continue to lose money. "I predict before the end of the year you'll see a new distribution channel for magazines," Mr. Brewster said.

Mr. Leonsis, whose America Online unit has been pilloried as the laggard within the AOL Time Warner empire, said the division will look to capture additional dollars from marketers from beyond traditional ad budgets. The targets are budgets for customer relationship marketing, couponing and regional and local marketing.

"The whole pie is in the trillions of dollars rather than the hundreds of millions," he said. "We believe that as more and more people spend more time online, eventually the ad dollars will follow."

NYT looks to Boston
Ms. Robinson hinted The New York Times Co. will continue to look to the Boston market for growth. After purchasing The Boston Globe, the company recently acquired a stake in the Major League Baseball team the Boston Red Sox and a regional New England sports network. The acquisitions will help the company put together cross-platform ad deals, she said, that can include promotions on boston.com, sponsored events at Red Sox stadium Fenway Park and ads on the cable channel.

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