The toughest upfront ever?A perfect storm for media buyers?

Caveat Emptor!


Let me count the ways that the 2007-08 upfront national television media buying marketplace may be the most challenging in the last thirty years:
1. Declining network ratings have depressed the supply of audience available to sell to advertisers
2. Strong demand for national TV ad time following several quarters of strong scatter sales
3. Inflationary trends in the general economy with both advertisers and the networks discovering pricing power that has been unseen for quite some time
4. The ‘currency’ in which ad time is measured is in question on two fronts:
a. The networks must include delayed viewing via DVR’s in the ratings they sell or face a dramatic and unacceptable further decline in their advertising ‘inventory’
b. A confusing surrogate for commercial ratings is being offered by Nielsen for the first time this year and there’s definitely less here than meets the eye
5. There is a tremendous ratings gap between the few highly rated hit shows and the great majority of programs that deliver ratings that are simply not prime no matter when they air
6. The disappearance of negotiating ‘clout’ as the consolidation of mega advertisers and mega media buyers makes it impossible to walk away from the networks’ offerings
7. The industry’s fascination with ‘new’ media which to a very large extent are simply new platforms for existing TV content but which command much higher ad prices than their audiences would seem to merit

What to do? Prepare carefully for the upfront. Incorporate a certain amount of agility and flexibility in your buying strategies so that if faced with excessive pricing in one area the buyers can hold back dollars or move to other dayparts rather than falling on the sword of network inflation. Remember that there are always alternatives to the traditional upfront---quarterly scatter, last minute opportunistic, calendar upfronts---and to broadcast network television---cable, syndication, streaming video, spot television, unwired networks---and to television in general. The bottom line: explore all of your options thoroughly before making large, long-term commitments in the upfront. Have a “Plan B” in your pocket in case your initial strategies hit a wall. Caveat emptor.