For the uninitiated, the upfront is a period of time that comes sometime during the Spring - usually in May, but not always - when agencies commit the majority of advertising budgets on behalf of major advertisers to the next year's broadcast schedule. Typically this means the commitment of dollars to televisions schedules starting in the fourth quarter of the year through the 3rd of the following year. The practice is based on an ambient fear that if I don't make a pledge to the broadcast networks now, I will miss out on getting my clients' ads running in a highly rated program. Let's face it, as much as we would often times love to tell our clients "kiss off, sucker!," no one wants to go back to them and say, "no, I wasn't able to do what you asked."
This week, literally overnight, 60% of primetime inventory was sold and some buyers and sellers are anticipating this year's upfront to write over $9 billion in advertiser commitments.
This in spite of the bizarro reality of broadcast networks raising prices while still losing audience by the truck-load. This in spite of the fact that the upfront undermines media neutrality that agencies are supposed to have and maintains the partiality of an advertising universe that has TV at the center of it. This in spite of the fact that this practice stands in contrast to what a free market is supposed to enable, which is to ensure, that an the "real" value for a particular product or service is paid. By removing the market from the confines of real time and space from and sealing it off in a vacuum, the value of inventory is set without influence by macroeconomic forces, quality of product (in this case, programming), and most importantly, the imp of the masses. This gives sellers an unfair advantage by allowing the manipulation of demand by artificially controlling supply.
A few weeks ago, Jack Klues, the CEO of Starcom MediaVest, said in a speech given at the iMedia Buyer's Summit in Phoenix, AZ, that he would like his agency to consider online as part of the upfront. But I'm forced to wonder in light of the widespread dissatisfaction with the practice (except among sellers) whether or not this would be a good thing for this industry.
First of all, the primacy of fear that drives the upfront in broadcast simply doesn't exist in online. Sure, there is some inventory that is tight, such as keywords, financial content, and some tech/IT content. But for the most part, there is ample inventory online with no risk of every evaporating.
Secondly, this industry has grown up around a rabid belief in the free market and the fluidity of value. This is borne of the culture of liquid change and unbridled optimism, which is the foundation of the Internet industry. This hasn't always served us well, but this is an instance where it should. Open markets need to be in flux because values are in flux dependent, in large part, to when and where and under what circumstances the exchange is being made. The upfront fixes these variables and, thus, creates static trade. This is NOT what online advertising should be about or how it should be conducted.
None of this is to say that we don't explore any and all opportunities for bringing the benefits of the online advertising medium to the fore. I'm just not convinced that the upfront practice is the way to accomplish that.
For the time being, the biggest advantage online media interests can take of the upfront is positioning the medium as an alternative to the double-digit percentage increases seen in broadcast CPMs. Efficacy of the medium could be its attraction at a time when numbers like "hundreds of millions" or "billions" are being used in reference to what must be spent in the upfront to even play the game. All that's needed is a way in which to quantify online media's contribution to communications delivery goals in terms analogous to broadcast (this would be best realized by reach and frequency) and we might just have something.
The upfront is an idea to consider when figuring out how to make online a larger part of the media mix; however, it is a dramatically flawed system and I'm not so sure we should seat our future in a vehicle whose engine is broken.