Commentary by Scott Donaton

WE MUST ABOLISH THE TV UPFRONT

The Fragmenting Media Market Demands a Better System

By Published on .

I swore to myself that I wasn't going to write the column this year. I just wasn't. Because nothing had changed, and nothing seemed likely to. It seemed futile to once again vent my frustration at a
Scott Donaton, editor of 'Advertising Age.'

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way of doing business that almost everyone agrees is absurd -- yet no one acts to change.

Sensed shift
But in the last few weeks I've sensed a shift. There seems willingness on the part of those with budgets to back their statements with money. There seems to be, at last, a belief in the industry that change is not only necessary but also inevitable. This year could mark a tipping point, said a credible person.

And so, once more, I'm writing the words: It's time to abolish TV's upfront marketplace. And I'm assigning responsibility for it to the mammoth media-services agencies that wield enormous clout they have so far been reluctant to use.

Billion-dollar frenzy
The arguments against the upfront have never been clearer. Everyone agrees the cold-pizza process of committing billions of dollars of client money in a frenzy of late-night deal making is absurd. They agree that the broadcast networks' ability to raise prices while losing audience is nonsensical. They agree the upfront works against media neutrality and perpetuates the biases of a TV-centric system. They agree sellers wield an unfair advantage and manipulate demand by regulating supply.

Now there are indications that agreement on those issues could translate to action. Money is more willing to move to other TV segments, such as cable, and to dayparts other than prime time. Although there remains a gap in the values assigned to cable and to broadcast, buyers and sellers admit advertisers are the only ones to distinguish between the two. To viewers, it's all television.

TV's rivals are also more aggressive in making a move on budgets. Clear Channel audaciously hosted its own upfront presentation to peddle its "gone-from home" network of radio stations, outdoor boards and live events, in competition with the broadcast TV nets. Starcom MediaVest Worldwide CEO Jack Klues won cheers when he said his media-services company would consider online upfront buys. Some media executives laughed at Klues' remarks but knew it was no joke.

System based on fear
Their aversion to change is understandable. The upfront is a system based on fear because of the limited supply of broadcast ratings points. No media buyer wants to recommend that a client hold back money from the upfront and risk having to justify significantly higher scatter prices.

But there is also a point of diminishing returns. For advertisers in certain categories, there will come a moment at which broadcast prime time will no longer be the most efficient marketing tool. Carat North America CEO David Verklin, a blunt critic of the upfront -- "the system is broken," he says -- predicts broadcast prime time will eventually be dominated by three categories: automotive, entertainment and pharmaceuticals.

When I ask what it will take to truly remodel the upfront, I'm told buyers and sellers will have to work together. But sellers have no interest in scrapping a system that almost always works in their favor.

Power is balanced
So buyers will need to force the issue. One buying veteran told me that when he started out there were three TV networks and 25 agency media departments: "We couldn't go around them, but they could go around us." The power is now more balanced. Seven media agencies control some 70% of U.S. ad budgets.

Buyers don't want to be overly confrontational since they need to maintain long-term working relationships with the networks. But it's more important that they do what's right for clients. And that means finding a better way of doing business.

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