Coming off a 1995-96 season that media buyers and network executives both agree was a once-in-a-lifetime event, with circumstances unleashing a flood of advertising dollars, expectations have been lowered accordingly for the upcoming season.
"The rapidity with which all the deals transpired last year was remarkable and it means we will probably have to approach our negotiations a little bit cautiously this year," says Steve Grubbs, senior VP-national broadcast buying at BBDO Worldwide, New York. "Clearly the higher-rated, more popular shows and need for advertisers in some categories to secure those shows is what creates the urgency."
Last year's network prime-time upfront season hit a record estimated take of $5.5 billion, as networks asked for and received rate increases of around 20%. The market was pumped up in part by heavy buying from the movie and video categories and from prescription drugs making their over-the-counter debuts, such as stomach medications Pepcid AC, from Johnson & Johnson/Merck, and SmithKline Beecham's Tagamet.
During the fourth quarter of 1995, SmithKline Beecham spent $12.2 million on network TV to support Tagamet, and J&J/Merck doled out $21.6 million, according to figures from Competitive Media Reporting.
With last year's upfront galloping at breakneck speed, even merely an inflationary rate increase of 5% this season may seem like a decline.
Still, the total amount spent on upfront commitments may reach $6.2 billion in 1996-'97, says Joseph D. Abruzzese, president of sales for CBS. That figure represents an 8.7% jump over 1995-'96.
Even though network shares of viewership and budgets have been shrinking gradually, network sales remain strong in both prime-time and daytime.
"The fact of network is there's a little less of it each year, but it's still the biggest possible number you can buy. The reach is incomparable," Mr. Abruzzese says. "What I fear is that a naive person will worry about the decline and look at the lowering prices."
Political ads could be a wildcard for networks this fall as the presidential campaign comes down the stretch, says Jon Nesvig, president-sales at Fox.
Important categories of advertisers-movies, fast-food, seasonal retail promotions and others-still rely on network time, he says. Network shows deliver audiences at a specific time, something few cable offerings can guarantee.
"Time specificity is still awfully important to advertising and, when you have to build reach quickly, network TV is still best for doing that," Mr. Nesvig says.
A `CORRECTION YEAR'
Mr. Nesvig says last year's upfront was a "correction year" where advertisers either paid a significant premium or didn't get on the air. But networks are continuing efforts to increase the visibility of major advertisers, either through special events on holidays like Halloween or Valentine's Day or other tie-ins.
Polaroid Corp., for example, bought time throughout NBC's "Must See TV" slate of comedies recently, and the peacock network's promo spots for these shows featured an instant camera resembling Polaroid's.
CBS and others are using heavy promotional dollars and multiple showings of entries to introduce new shows, such as CBS' full-court press for "Nash Bridges" during NCAA basketball broadcasts.
BRANDED PROGRAMMING BLOCKS
Another strategy is branding programming blocks, such as ABC's TGIF lineup of family-oriented Friday night viewing or NBC's Must See TV.
However, observers say this approach has more effect on audiences than buyers, who choose individual programs and not networks.
Even if this year's upfront season sets a record dollar amount for commitments, several market uncertainties linger.
Cancellations and release requests by advertisers were higher than average in 1995-'96, agency sources say. Whether marketers will fulfill their '96-'97 upfront plans remains to be seen.
Also, advertisers shut out of last year's upfront eventually placed their money in cable and syndication, a strategy that may return this spring, some media buyers say. Even though this year's upfront could be another record-breaker, buyers say the mood this year will be more relaxed and the negotiations more drawn out than in last year's feeding frenzy.
`A LOT OF FEAR'
"Last year there was a lot of fear in the upfront, and that drove prices up," says Brian McHale, national media director at Media That Works, a Cincinnati-based media-buying shop.
In addition, it remains to be seen whether the networks maintain their interest in younger audiences. Last season an inordinate amount of debuts targeted at the 18-to-34 and 18-to-49 age breaks, and relatively few were succesful.
"Networks went after younger viewers last year and it didn't take off. This year, you'll see fewer new shows," Mr. McHale says.
All in all, factors like these have made some buyers grumble over the offerings.
"Prime time is still the gold standard, but a little lead has creeped into the gold," says Gene DeWitt, president of New York-based media buying service DeWitt Media.
"Prime time is less prime: There are fewer and fewer high-rated shows. Networks are charging an enormous premium for fewer new shows-everyone has to keep in mind there are 22 new shows out of 52 weeks. So it's worth less but they're asking more," he says.