Call for change: Marketers bash ratings, TV upfront

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Marketers have launched a two-pronged attack on broadcast TV, calling for commercial ratings to replace program ratings as the basis for advertising rates, and for dramatic change in how the upfront is conducted.

The Association of National Advertisers said last week it planned to form a committee devoted to exploring changes in the upfront ad buying market, after a survey found 58% of members are dissatisfied with the current upfront format.

That coincides with 85% of its marketer members saying they would prefer minute-by-minute ratings to be the basis for deciding how to place TV budgets. Currently, Nielsen Media Research provides ratings for programs as the standard. Nielsen does collect data on commercial viewing, but marketers and agencies must pay an extra fee to access that data, so the majority of TV ad time is bought based on program ratings.

ire-arousing issues

The survey, revealed at the ANA's TV Forum in New York, tallied responses from 165 members, including some of the nation's biggest advertisers: AT&T Corp., General Motors Corp., Kellogg Co., MasterCard International, Pfizer, Procter & Gamble Co. and Verizon Communications.

The upfront committee, according to Bob Liodice, ANA's CEO, and David Verklin, CEO, Aegis Group's Carat North America, will look into issues that have aroused the ire of marketers and agency executives. For example, shifting the upfront buying market from May to late summer or early fall-when marketers have a better sense of their budgets for the following year-was favored by 55% of those surveyed.

"It would tie in better with clients' marketing-planning cycles," said Mr. Verklin, "and would allow clients to have a firmer, more accurate picture of their network TV spending requirements."

At the conference, Mike Shaw, president-sales and marketing, ABC Television, said buyers will always want to jump the market. "Go ahead, move the upfront to September. We'll still be taking your calls in March."

A more radical alternative is to negotiate deals all year long, according to a 52-week calendar, essentially making the entire ad sales market a scatter market. Networks could then roll out new programs year-round, rather than all at once in the fall. The early rollout of shows in summer already practiced by Fox Television appears to be moving in that direction, but Mr. Shaw expressed skepticism that media agencies could handle the complexity of doing deals constantly.


"If we went to all scatter, we could handle that," said Mr. Shaw at the conference. "But agencies would have a problem."

Another idea is to institute a closing bell during negotiations, much like the stock market. "I just don't think it's good for either seller or buyer to be doing business at 4 o'clock in the morning when there are large sums of money involved," said Mr. Verklin. But Betsy Lazar, general director-media operations, GM, believes it would be hard to enforce. "There are many situations in which the buyer and seller would just as soon conclude negotiations rather than take a chance on the seller reassessing their inventory the next day."

The upfront refers to the period in May when TV broadcast networks try to sell between 75% and 80% of their airtime ahead (or "upfront") of the new fall TV season. Last year, the upfront commanded a 15% increase in prices from the year before, raking in about $9.3 billion in ad dollars. Unfortunately, much of what advertisers bought into delivered poor ratings, and many shows were pulled, leaving in their wake a tide of make-goods for advertisers. Marketer dissatisfaction is evident in the survey response that 45% plan to reallocate dollars away from TV to other media over the next year.


According to Michael Gallant, a market researcher at CIBC Worldwide, Walt Disney Co.'s ABC was the poorest performer, and will likely be responsible for $110 million in makegoods. (See related story, P. 3)

The call to change the audience-measurement standard from the current practice of monitoring the number of people watching TV programs to how many people watch commercials was thrust to the forefront when Nielsen and TiVo announced a deal to report how many watched a show after recording it. Marketers and agency executives argue that adding in those viewers to a show's ratings would be misleading, since that offers no proof they viewed the ads. "Nielsen has the data, other parts of the world use it as a standard, why don't we?" said Mr. Liodice in a phone interview.

"Minute-by-minute ratings are available," said Jack Loftus, a Nielsen spokesman, "but I don't know think many advertisers know that."

But some marketers want even more. "Yes, we get exposure on television and that can be measured," said O. Andrew Jung, senior director-advertising and media services, Kellogg's, at one of the ANA conference panels, "but we want to know if the viewers are engaged." Mr. Jung later said he would be willing to pay for that research.

"Some people should be careful what they wish for," said an ad sales executive at a major cable network, "because commercial ratings will only prove how culpable advertisers are in failing to hold audiences."

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