OMD plans strategy to challenge upfront

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Flexing the $3 billion muscle it brings to the national TV marketplace, Omnicom Group's OMD, New York-backed by two key clients-is formulating a strategy to upend the upfront.

According to those with knowledge of the plan, OMD executives met last week to create a buying strategy in the fourth and first quarters leading up to the network TV upfront, the annual springtime ritual in which broadcasters sell blocks of time for upcoming program schedules at volume discount to marketers. Such a move would challenge the way TV buying is done and conceivably move the market up several months.

"This is about changing the whole menu," said an OMD executive who requested anonymity. "It has to do with gathering our clients and OMD together to start the market in the fourth quarter and early first quarter and base it on ideas, so that you have maybe 30 strategic ideas, eventually over 10 clients."

OMD, which was the largest network TV buyer in 2001, counts on its roster blue-chip clients including FedEx, Hershey Corp., Johnson & Johnson, McDonald's, MGM Distribution Co., Nissan, PepsiCo., Visa International and Universal Pictures. It could not be determined which two clients are on board with the new plan; a third client is said to be joining in.

The movement, led by OMD North America CEO Page Thompson, is to develop a buying strategy early, so that its clients can also plan on spending in other media, such as print, events, sports marketing, outdoor and the Internet, rather than rushing to the TV market at the last moment. Mr. Thompson declined to comment.

The upfront has long been the subject of media buyer and marketer frustration. This year, with advertisers committing $9.3 billion to broadcast, with cost per thousand price increases rising as much as 20%, frustration has led to anger. Many marketers have seen sales rise much more slowly-or even decline-and question why they should pay for such steep hikes.

One OMD executive said that most years, discussions with clients for an upfront strategy occur in March. "They go out in March and you know what they talk about? They talk about what the [cost per thousand] increases are going to be and they talk about moving everything into the upfront and not wait for scatter. That's what it's about."

past rumblings

In the past, rumblings emerged from large consolidated agencies about challenging the upfront by simply not participating. But this has yet to happen. "I don't think anyone can physically sit out of a marketplace unless they have a huge strategy on their hands," said David Levy, president-entertainment sales and marketing and sports at AOL Time Warner's Turner Broadcasting Sales. While he was not familiar with the OMD initiative, he said, "We will listen to anything from a client or an agency ... as they want to discuss future years. But we are certainly going to do good business deals."

established shows

Part of OMD's strategy is to commit to established shows that will be back for the fall season, such as NBC's "ER," and then build integrated programs around them. Others see potential problems with that strategy.

"You want program deals, you can do them early, but you have to pay a premium for it," said a media company executive who requested anonymity. "We take the risk buying the programming." If time is bought in the upfront, networks guarantee a certain level of ratings points, regardless of which programs they appear in.

One competitor was unimpressed with the plan. Mel Berning, president, U.S. broadcast at Publicis Group's MediaVest, said the OMD idea is nothing new. "This is the kind of stuff we do all the time. We do strategize early, often six months ahead."

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