Some Fear, Lots Of Loathing, But Mainly Business As Usual, Say Upfront Buyers/Sellers
The emerging technologies of DVRs will force agencies to think very differently about how they approach research and analysis as well as creative issues, said Tim Hanlon, vice president and director of emerging contacts for Starcom MediaVest Group, who was the keynote speaker at MediaPost's Media Magazine's 2005 Outfront Conference at the Yale Club.
"Comcast and others have made a number of positive steps in the direction of recognizing DVRs' capability to help advertisers, and there are multiple touchpoints available for media investment," Hanlon said.
Most importantly, the divergence in how people under 20 are using media requires new thinking about the current classifications used to identify consumers.
"Think about the 18-49 demo--there is a vast world of difference in the way someone 18 and someone 49 consumes media and lives their lives. One is getting ready for college, and another one is getting ready to pay for college. Some people have suggested putting a teenager on the boards of companies. That's not a bad idea, certainly in terms of using them in more in-depth focus groups scenarios. People under a certain age simply have a different concept of media than any of us do."
In the area of DVRs, the notion of "time-shifting"--watching what you want, when you want--is also going to have a massive impact on the industry. But it will also provide great opportunities for marketers, Hanlon said--something he learned from his wife.
"I came home from work one day and my wife informed me that she'd bought something from QVC," Hanlon said. "Now, she's not the kind of person to sit on the couch and eat bon bons and wait for the next cubic zirconium to pop up. But she was putting together a scrapbook and she typed in that word into the DVR's search, and it brought up a product that was being sold in the middle of the night. Without that search, she never would have watched QVC, and she never would have bought something from them. That's the kind of dynamic we have to tap into. We need to look into addressable advertising, both local and national, and create more direct marketing opportunities."
Hanlon's presentation was followed by a roundtable of media buyers and TV sales executives, which examined the myriad issues facing networks, agencies, and clients, and featured Elizabeth Herbst-Brady, senior vice president and director of broadcast for Starcom USA; Charlie Rutman, CEO of MPG; Mike Shaw, president of ABC ad sales; Charlie Collier, executive vice president, general manager of advertising sales for Court TV; Bob Cesa, executive vice president, barter advertising and cable sales for Twentieth Television; and Richy Glassberg, senior vice president and director of sales, TV Guide Television.
"Advertisers are looking for opportunities other than the traditional upfront," Cesa said. "But the upfront is still important. It's not dead, and it probably won't change much in the short term. But we are getting after advertisers and we are changing things."
There seemed to be a consensus among the panelists that this year's upfront would be up slightly, or even a little flat, compared to 2004.
As to why some deals--notably in cable--tried to get an early start, Rutman pointed to "fear" being a prime motivator--both for getting things started and for maintaining the status quo.
"In a few cases, people feel that they have to get their money down now," Rutman said. "There's a great deal of uncertainty out there. But overall, there's no stronger demand compared to past years' upfront."
ABC's Shaw, who spoke on a similar panel sponsored by Television Week and Advertising Age, along with Court TV's Collier later that morning, said that a strong scatter market has actually dampened the urgency for many marketers, noting that the networks are dealing with buyers and advertisers 52 weeks a year, not just in the upfront season.
"Money will be moving around this year," Shaw added. "Networks, overall, will probably be flat. We've got three hit shows, NBC is down, and CBS is on the rise. That's the dynamic this year."
Starcom's Herbst-Brady noted that the mania over branded entertainment deals takes months, and so a lot of money that might have been devoted to the upfront is wrapped up in negotiations for product integration.
"Money is being used to follow new technologies and branded entertainment," she said. "Branded entertainment can't be negotiated in 24 hours. It takes months."
While the panelists all agreed that the industry is in a period of transition as DVRs and other technologies take hold, on the next Outfront panel, Erwin Ephron--partner with Ephron, Papazian & Ephron-- could barely hide his disdain at what he seemed to consider a fetish for the newest method or gizmo.
"We spend an awful amount of time worrying about the new media," Ephron said. "It would be useful for people to better figure out the old media first."
He further dismissed the often breathless talk given to "Return on Investment" and branding.
"Advertising doesn't teach people about products anymore; it's a defensive action for mature marketers by and large," he said.
In terms of the upfront process, both Ephron and Mike Lotito, founder and CEO of Media IQ, expressed concerns about the data underlying many of the decisions made by advertisers and buyers.
"Data can tell advertisers what they did, not what they should be doing," Ephron said. "There's so much noise to sort through. A Nielsen rating has a lot of noise. Where are numbers about how many people saw the ad? And were they talking or reading InStyle magazine? Our approach is, 'Who is your competition? Most advertisers don't care what Procter & Gamble paid. They care about what the other widget maker paid."
Lotito disagreed about what clients want to know when going into the upfront.
"Our clients don't care whether prices are too high or too low, they care about whether it helped them sell their products," Lotito said. "They'll pay up the wazoo for CPMs if you can tell them they're moving sales."
On the Television Week/Advertising Age panel for The Upfront Summit, Debbie Richman, director of national television for OMD, the only buyer on a panel of sales executives including Court TV's Collier and ABC's Shaw--discussed the state of the upfront.
"There's a lack of excitement, hesitancy, given what's going on in scatter," Richman said. "The feeling is, 'why should I rush, if I can get a cheaper price in scatter? Still, advertisers know that they can't walk away. They know they need the process, but that's about it."
The issue of clutter and the need to stand out also are on the minds of advertisers, the panelists said.
"We have our news shows, trials, during the day for a specific audience and entertainment at night, and they have to be sold differently," Collier said. "And therefore, we essentially have two brands, which eases any confusion."
"Commercial pods are longer than ever, so it is harder for brands to differentiate themselves," Richman said. "But in terms of engaging consumers, if you have a good show, viewers are more likely to be engaged when it comes to the commercials as well."