• by Diane Mermigas , March 7, 2008

Pity the poor advertiser. A crippled economy has arrested consumer spending. Television strains to bolster its diminished mass-market might. More accountable online metrics search for rewards in an uber-fragmented maze. The business of buying, selling and creating ads is up for grabs. Still, unprecedented opportunity for innovation lurks amid the chaos.

Enter the TV networks' upfront: a frontal assault on ad dollars to which they no longer lay unchallenged claim, but on which they utterly depend. Unlike past recessions, advertising dollars are being spread over more new places. Cable moves close to ad rate parity by matching and often exceeding the series, sports and news audience demographics on which TV broadcasters do their bidding. With cable now attracting 59% of prime-time viewers to broadcast TV's 41%, it is time that TNT and TBS hosted their upfront previews the same week as the Big 4.

Also for the first time, YouTube recently hosted its own "Videocracy" upfront ad event for advertisers, kicking off Google's crusade for online video ad dollars. Even if ad budgets remain unchanged, a greater portion will be spent online in what is looking more like a flat domestic market (with quadrennial political and Olympics comprising the only 1.5% projected gains). A tepid upfront could be a harbinger for 2009, when TV ad spending is expected to decline.

While the four-month writers' strike accelerated the pace of irretrievable ratings losses, advertisers became more comfortable with Web spending. Even NBC research supports better consumer response and interaction with pitches in streamed video. Although online advertising is likely to feel the pinch of recession, its interactive, targeted, traceable, low-cost capabilities make it a good value proposition. The 25% growth in online ad dollars is increasingly spread over 2,000 specialized Web sites, and away from general interest portals.

The good news is the steady flow of new assessment tools to match target consumers and advertisers. The bad news is too few hours to fully analyze and monetize the changing ad landscape. The reality is that advertisers see the value of moving beyond their message to connecting with--and ultimately transacting with--key consumers.

The big question for the broadcast and cable TV networks, which can offer no such interactivity, is how much of the ad mix is theirs in a year when spending is tighter and wiser. Despite how it appears on the surface, this year's upfront is not business as usual.

There is only one way the broadcast networks can hope to match last year's $9 billion in upfront ad commitments, given the new series development hampered by the strike. They must continue to give advertisers more of the online exposure they seek on their branded Web sites. That strategy has limited appeal to advertisers that recognize the problems inherent in a wholesale shift of mass audience fare from TV to the Internet, which is anything but mainstream.

ABC, CBS, Fox and even NBC (with promises of the anti-upfront) continue to approach ad sales with traditional sensibilities, even as the entire ad world is radically changing out from underneath them. The recent first-ever cash makegoods from broadcast networks will not be the last. Advertisers that shift more of what they spend on TV to the upfront will be less a vote of confidence and more an effort to avoid the 40% price increases for a scarcity of scatter spots, which occurred even during the strike. A partial program season of complicated live, C3 and DVR-related viewing metrics (in addition to biometric, TiVo and other private research) could hamper as much as help negotiations for a limited or 52-week season. The soon-to-break children's upfront may struggle to match last year's nearly $1 billion ad spend, even with live or live-plus-three commercial ratings.

By some measure, all of these factors make this an opportunistic time for media buyers and ad agencies to engage in some creative maneuvering. Mapping consumer reach and returns across all media is a Herculean task, given variances in metrics, content and economics. That exercise could advantage marketers that are brave and smart enough to craft their own creative and buying propositions. The notions of auction pricing and measuring consumer engagement will only become more significant as Google acquires an integrated DoubleClick to redefine all advertising currency.

That makes digital interactivity the killer app for brand marketers.

Clearly, all this is top-of-mind at the AAAA annual media conference in Florida, themed: "Digital Changes Everything." That's why Optimedia has created Content Power Rating to measure a series' cross-platform audience reach and engagement. TRA's research system measures effectiveness, matching the ads that consumers receive with the products they buy. Group M chief and industry maven Irwin Gotlieb is angling for his Indivi Technologies to track consumer ad targeting and response across any screens--from TVs and cell phones to computers and PDAs. Microsoft's new engagement mapping, from consumers' initial exposure to e-purchases, is destined for broad application.

The advertising brain trust that is taking matters into its own hands understands and accepts the important role of television in their growing media mix. They also know advertising will shortly become a three-tiered market with online on top, television in the center and other traditional media at the bottom, as Screen Digest forecast this week. Don't be surprised if some of them begin recrafting and repricing TV advertising to their liking as early as this spring.