• by Courtenay Harry , March 4, 2010

Planners and television buyers are taking a harder look at what's planned for the back half of 2010 and setting initial budgets for 2011. They are determining what broadcast and cable inventory they will advise their national advertisers to purchase.  The pre-upfront is underway.

Mr./Ms. CMO: Now is the ideal time to ask your agency how the television game is changing. A well-allocated upfront budget is a safety net to ensuring the 2011 media plans you approve in the next few months are effective when they go live next year at this time. 

Agencies we are working with are educating clients on the changing television space.  They are showing how national and local buys in 2010/11 could differ from buys made just last year. And, they are telling clients what's for sale now to run in Q3/Q4 2010 that was not available when they went through the budget allocation process last year at this time.

Some pre-upfront questions we are starting to hear from advertisers will continue to be discussed over the next few months.  Conversation revolves around how to allocate television budgets: national, local and digital TV. Digital TV advertising encompasses interactive, enhanced, advanced units, video-on-demand, long-form ads, and content sponsorship.

1.     Budgets: How much should I spend on digital TV? Conservatively, advertisers are allocating 5% of total traditional television budgets (national + local) towards digital TV advertising.

When looking at CPMs, know that an apples-to-apples comparison to traditional television is not a fair comparison. Instead, when determining digital TV budgets, balance the two parts of the digital TV plan: 1) CPM for the :30 impressions; and 2) various pre-determined metrics for the engagement piece (e.g. long-form ads, requests, coupons redeemed, etc.). 

2.     Budget allocation: Is digital TV national or local inventory? The answer is both. Depending on your strategy, you may be able to implement across a national footprint or focused in select markets.  This is where the upfront piece gets tricky - certain digital TV advertising is sold by programmers and remains in the upfront budget.  VOD is a good example. However, other digital TV advertising units are sold by the distributors. Interactive units fit this model. That portion of the overall digital TV advertising investment comes from non-upfront spending.

At this point in the pre-upfront stage, the best bet is to take a portion of your total television dollars and shift them into a local budget to buy inventory across distributors.  However, even with the title "local," you can still create a multi-market or national footprint.  The increase in brand awareness with digital TV advertising in multiple markets can be high.  However, piecing together the U.S. map to create a footprint can be a messy process.

3.     Case studies: What's a realistic ROI for digital TV advertising? The list of case studies for advanced advertising is growing.  Media sellers have a catalog of data to show how the new applications drive results.  Unlike last year, agencies will have a better understanding of once unknowns such as redemption rates for video coupons (press remote button, a coupon is sent to your home) or how addressable ads drive viewer retention.

Agencies should be following brands that took the leap into advanced television as part of last year's upfront. Many of these campaigns will be launching over the second half of the year and will be helpful as case studies for advertisers that waited until this upfront to enter the space. Are your competitors in this group?

For example, Pillsbury is launching a dedicated channel as part of the General Mills 2009 upfront deal with AMC and WeTV. The brand will have a continuous presence on television with its own branded VOD channel. Consumers could view recipes, watch cooking videos or receive samples or coupons with a press of the remote.   The brand could learn more about its consumers' interests and adapt creative dynamically. Metrics from these and other soon-to-be announced dedicated channels will help to forecast usage and set best practices.    

The pre-upfront is a great time to be at an agency: time for new ideas, new thinking. But, it's also a window of opportunity for sigital TV advertising -- when advertisers need to show agencies their interest in the space, and allow the agencies to plan television accordingly.  Having these conversations now ensures that next year at this time, when the media you are planning goes live, you have a solid media plan working hard for the  brand.