Advertisers are backing off their aggressive pricing demands in the upfront marketplace, say insiders. As the July 4 holiday stares marketers in the face, a sense is emerging that they need
make deals soon to get on the air in the fall.
Instead of holding out for double-digit price decreases as threatened, most agencies could well settle for 5%-9% decreases from NBC, the most ratings-challenged network, and 2%-6% decreases from CBS, ABC and Fox. Cable outlets could see things shake out in similar fashion, depending on whether they are first- or second-tier operations. Magna is in discussions with some networks and Zenith Media is said to be gearing up for negotiations this week. Group M is also in intense discussions with NBC Universal over a deal encompassing the NBC broadcast network and its cable outlets.
Some agencies are bringing a reduced amount of money to the table, then trying to ensure that the terms negotiated hold true in case clients decide to commit additional funds at a later date. What's new this year is the amount of potential money under consideration for such "expansion rights." But some networks are resisting the tactic, telling agencies to purchase the ad time in the scatter market instead.