News of the Starcom/NBC deal comes as marketing executives from around the country gather in New York this week as the broadcast TV networks unveil their prime-time schedules for fall.
A wild and woolly upfront sales marketplace could break next week, and both buyers and sellers expect it to be strong.
CLOSE TO A DEAL
While a number of media buying agencies and networks have been having discussions, the Starcom/ NBC deal is the closest to fruition, network executives reported.
In a concept deal, a buyer usually agrees to spend a certain share of its clients' dollars on the network, generally a larger share than was spent the previous year. In exchange, the buyer gets a cost-per-thousand that's a percent or two under the average. That CPM will be determined after the seller closes its other upfront deals.
"It's not surprising that Starcom is leading the market," said an executive at a rival network. "They've won a lot of business in the last year, so they've got a lot to spend.
"For NBC they're hell-bent on writing $2 billion in the upfront again. So they've got very high bases with most advertisers and their numbers are falling. This allows them to establish a base of dollars so they can hold out for higher CPMs with others."
Chicago-based Starcom, whose executives were traveling and couldn't be reached for comment by press time, spent $722 million on network TV last year. NBC's president of ad sales, Keith Turner, didn't return calls.
In another development, a BBDO Worldwide executive met with top sales executives at ABC, CBS and NBC to tell them he was acting as lead negotiator for all Omnicom-owned agencies that will participate in the upfront, including DDB Worldwide's Optimum unit, TBWA/Chiat/Day, Creative Media and Advanswers (including the former Paul Schulman Co.), among others.
BBDO's Steve Grubbs, exec VP-director of national TV buying, will present an overall amount of ad dollars that Omnicom will bring to the table and set such parameters as CPMs; he will not negotiate details for all Omnicom clients.
This is an effort to maximize Omnicom's clout in the market.
In the initial discussions, Mr. Grubbs is acting as lead negotiator for commodity dayparts, such as daytime and news, where pricing and other issues are fairly consistent. He will not represent the various Omnicom shops on prime-time deals, since that daypart has big price and other variations the other agencies feel need to be negotiated on individual bases.
Neither Mr. Grubbs nor Daryl Simm, president-CEO of Omnicom's global Optimum Media Directions, would comment.
The hottest network during the upfront should be the WB, which is likely to try to convert all guarantees to its strong 18 to 34 demographic.
Fox and CBS also appear to be in good shape, with Fox strong in the 18 to 49 demo and CBS coming off a strong season.
ABC continues to struggle, and buyers expect it to be relatively buyer-friendly in the upfront.
With cable networks expecting their biggest upfront ever, the only deal that appeared to have been struck last week was one involving GM Mediaworks. The buying operation for General Motors Corp. was said to be close to a concept deal