• by Joe Mandese  @mp_joemandese, July 6, 2006

With official final estimates for 2006-07 network prime-time upfront ad deals being reported by the advertising trade press (see related story in today's edition), it seems that the upfront market may have shrunk. The big question on the minds of both buyers and sellers, of course, is how much money has been held back for next season's scatter marketplace. The answer may be not much, according to the findings of an unscientific survey conducted online by InsightExpress for MediaPost. Asked what they believe the reason for lower upfront as spending is, most advertisers and agencies said they were either being diverted to other media, or other marketing platforms, and would not resurface as incremental network ad spending next season.

Eighty-three percent of marketers and 62.5 percent of media buyers said they believed upfront ad dollars have been diverted to other sources, though opinions for the destination of those funds was split among advertisers and agencies. Half of the advertisers responding to the survey believe those budgets are going to other forms of marketing, while half the agency executives believe they are simply going to other forms of media.

Not surprisingly, only a minority of media sellers believe those funds have been diverted from network TV, with a third expecting they will rematerialize during the scatter marketplace (see table below).

The survey, which was launched in mid-June as trade publications began reporting about initial estimates for the 2006-07 upfront marketplace, also suggests that the trade press plays a significant role in shaping expectations about the marketplace, and is generally considered the most credible source for such information - more so even than public comments by advertisers, media buyers and media sellers, as well as public reports by Wall Street securities firms. It should be noted, however, that results are drawn from a relatively small base: 53 respondents, and only a handful (six) of advertisers, and therefore should be treated anecdotally.

Among press outlets, advertising trades were deemed more credible than either TV industry trade magazines or major daily newspapers in their coverage of the upfront, and Advertising Age was deemed the "most" or "second" or "third" most credible source overall, followed closely by MediaPost and Mediaweek, which were essentially tied. More than half (54.4 percent) of the respondents said they believed the trade press' coverage of the upfront, even though a slight majority (56.7 percent) said they believe this year's upfront negotiations were conducted more "secretively" than normal.

A significant minority (39.6 percent) of respondents said they feel upfront negotiations with the networks should be kept secret, though the percentage of media buyers (43.8 percent) and media sellers (50.0 percent) outweighed the percentage of advertisers (33.3 percent) who felt that way.

A slight majority (56.6 percent) of all respondents said network upfront sales data should be compiled and reported by an independent third party such as the Broadcast Cable Financial Management Association, with 83.3 percent of advertisers expressing that thought.

Despite their overall confidence in trade press coverage of the upfront, only 3.8 percent of all respondents - and not one advertisers - believe the upfront marketplace is "wrapped up" when trade publications report it to be. Nearly 70 percent of the respondents said they did not expect network upfront ad deals to be completed until after July 4th Weekend.

It appears that this year's upfront marketplace will be lower than last year's. What do you think will happen with those budgets?
	Advertisers	Media Buyers	Media Sellers	Other	Total
Held back for quarterly "scatter" buys during the rest of the year	0.0%	25.0%	40.9%	33.3%	30.2%
Upfront budgets were downsized as part of overall ad spending cutbacks	16.7%	12.5%	9.1%	22.2%	13.2%
Upfront ad budgets were diverted to other media	33.3%	50.0%	36.4%	22.2%	37.7%
Upfront ad budgets were diverted to other forms of marketing	50.0%	12.5%	13.6%	22.2%	18.9%

Source: A MediaPost survey conducted only via InsightExpress. Base = 53.