Despite dwindling ratings , CPM increases and intense demand for TV ad time, the upfront proceeded in relatively smooth fashion. And yet, some players are renewing their calls for an updated approach to one of advertising's biggest markets.
It's hardly novel to hear a media buyer grumble about the upfront process, that time each spring when the TV networks sell the bulk of their ad inventory for the coming fall season, but the complaints do seem to be multiplying.
What changes should be made? Buying executives suggest moving the upfront to September from May, and call for less rigidity in the process -- letting buyers create more seamless packages, for instance, between two or more networks owned by the same media conglomerate.
Below, five agency chiefs point out the issues and offer solutions.
Below, five media agency chiefs pinpoint the issues and offer solutions:
Bill Koenigsberg, CEO, Horizon Media
The upfront has four constituencies: programmers, advertisers, a sales arm and media agencies. The focus should be on what's in the clients' best interest here. To commit in May or June six to eight months out, in terms of clients already knowing what their marketing position is going to be and what their true fall year planning is going to be, is quite premature.
The programming landscape for network, TV and cable has become a year-long cycle. We no longer have a real premier season even though the networks talk about season premiers in mid-September, and a lot of these programs don't make it through a full season.
To move the upfront to a better business cycle for marketers, the ideal timing would be mid-September, but in order to do that you have to get alignment from many people. The sales arms of networks and the cable industry have pretty much said that they'll come to the table any time we want them to come to the table. The programming cycle would have to change where the new season would start in January, not in September, because pilots and development would have to move. If the sales arms are willing to do that , network programmers are willing to change cycle, and advertisers have a better picture in September than in May, that could change the paradigm.
One could argue the process isn't broken because 98% of the commitments stick. Basically, what's broken is that decisions are being made much more in a vacuum and with less business intelligence. There needs to be a collaboration of change.
Nigel Morris, CEO, Aegis Media Americas
Coming from the U.K., I had a lot of preconceptions about the upfront, and there seemed to be an anachronism in the way the media world was developing. Its problem is it doesn't actually recognize the critical thing around integration of the different media channels that 's driving ROI for clients.
The upfront has a genuine role to play, but it's not necessarily in the long-term interest of the TV market to force monopolistic pricing in the short-term, and it's quite insular. TV platforms didn't make the most of the digital video and streaming products last year because they in essence tried to separate them from the TV assets. That was a mistake because they probably managed to maximize the yield against inventory in that year. We didn't really establish those streaming platforms as credible platforms in the market to take share, especially with Netflix being 63-64% of the streaming market with no ad support. However, with what may happen to Netflix, it might open up the market again.
I'm hoping that the TV networks either individually or in collaboration take a radical view about where that streaming market is going, and delivery and distribution of video content over the next three to four years. Design the upfront around that . Also, ultimately the more digitalized and more streaming the video market becomes, the more trade-able it'll become. What you've got developing alongside the upfront and conventional media markets are more electronically traded bidding markets. Decisions will be more data-driven than relationship-driven. The two markets are going to come together and merge as we go on.
Jacki Kelley, global CEO, Univeral McCann
Having the opportunity to lock in guaranteed, advanced commitments to secure the best placement for our clients at lower pricing is a great thing. Of course, knowing that a percentage of the inventory sold is firm can be tricky, but possible to work around if necessary. We have three areas that we feel are "hot topics" that all folks involved with the upfront season face:
Improved metrics: We continue to use better metrics that align with our clients' business outcomes. The conversation needs to change to negotiate on these outcomes vs. simply price. With the investment in data, analytic talent and infrastructure, there can be a much richer conversation. For example, how about a cost per awareness? The idea of buying on engagement seems like a natural progression -- we know that people are multi-tasking with media as they are watching programs and commenting on the content in real time via social networks and portable devices, so quantifying that level of engagement and factoring it into the pricing for specific programming would be a leap forward for TV sellers.
Holistic approach: The overall upfront process needs to take on a more holistic approach to buying. As the world continues to change and become more mediated than ever, we are presented with several media opportunities that go beyond TV and yet, the upfront is still focused on TV negotiations. The scope should reflect the ever-evolving environment that we live and work.
Automation: There is an extreme amount of information being sent back and forth which is unnecessary for both sides. Better electronic automation would alleviate much of the "busywork" that both parties deal with each season.
Dave Ehlers, CEO, Optimedia
The issues with the upfront are well documented, but we do see three areas for improvement. We would like to see more flexibility as part of the process. This would help clients become more fluid and be able to make changes throughout the year as their business needs change. Right now, they have cancellation options and we have some flexibility to shift across quarters. However, all of that has time and dollar limitations.
In addition, it would be good to have the ability to move between networks within a mega-media company. We have been successful at doing this but it becomes a request vs. something guaranteed. Basically finding ways to increase flexibility into the buy would be beneficial. As more programs and marketing opportunities are released throughout the year, it would also be interesting to have money set aside to consider these opportunities.
Most clients do not want to set money aside, as unspent money tends to get swept. Or maybe there is a clause with the networks that we will commit $XX over the year but some of that would be flexible pending further programming announcements. Have the same sales force sell the digital online components that sell the broadcast. It would be helpful to plan an overall video strategy -- this varies significantly by network.
Bill Tucker, worldwide CEO, MediaVest
There was progress this past upfront that we need to continue to build momentum on: broadband digital components incorporated into all upfront discussions, more multicultural components and good movement towards a total market approach, as well as convergence of guarantees and ratings across linear and digital viewing. However, the upfront also has much room for improvement.
We want to buy audiences, not platforms, and discussions need to move in that direction. Networks need to sell across their inventory, packaged for targeted audiences. Today, the industry negotiates based on Nielsen demos such as women 25-54. A 25-year-old woman has very different behaviors from a 50-year-old woman, yet these generalized demographics are still put forth as the core of our negotiations. This needs to change.
Additionally, structures need to evolve -- one person, one conversation across platforms, vs. speaking with a different person or group about network, another for cable, and yet another for digital. Lastly, mobile must become part of the discussion this year, from both the perspective of ideas that scale across three screens and further convergence of guarantees and ratings .