Commentary
Upfronts? We're Talking About Upfronts?
- by Cory Treffiletti , Featured Contributor, June 9, 2010
If you read that header and it reminded you a little bit of the infamous Allen Iverson rant from years past (when the basketball player went off on the word "practice"), then I did my job as a writer. If you read that line and thought I was going to go on a mild tirade about a somewhat frustrating topic, you might also be a little bit correct.
The last few weeks have witnessed the typical media coverage over the Television upfronts, with the usual happenings where one network is selling faster than the others and everyone plays games behind closed doors, promising delivery, bonus delivery, negotiating on costs and hoping that things go as "well as the year before."
Upfronts are a unique experience, in my eyes. They're a tool created by the networks to artificially create demand and increase pricing, and they work really well. They're a chance for marketers to get a sneak peek behind the scenes of the upcoming television season and bet their budgets on which shows will garner an audience. This upfront season is especially risky, with such powerhouses as "Lost," "24," "Law & Order" and numerous other shows getting canceled (R.I.P. "Heroes" and "FlashForward"), so the risk feels a little bit higher than last year, yet rates are still going up. How is that possible?
advertisement
advertisement
The upfront only works because of finite inventory mixed with a little bit of hype, but addressable TV and the potential of the new Google TV and updated Apple TV platforms may signal the beginning of the end (finally) for the upfronts. What happens when TV inventory is no longer a gamble? What happens when we no longer need to guess on the audience for new shows -- when the platforms will tell us what the actual audience is, and we'll be able to deliver a targeted TV message, in close to a "real-time" model? What happens when marketers demand the same accountability in TV that they do from digital, and TV truly morphs into a digital platform? When that happens -- and it will -- the upfronts lose their luster, and all that's left is hype.
The upfronts are as much ego as efficiency. I understand the desire to get locked in early for a show that'll be a hit, securing better rates than you would've (probably) gotten in the scatter market. I also understand the issue of leverage, but media is becoming a commodity, and TV is not going to be able to withstand that fact for long. Auction models and real-time marketplaces make leverage a dated component of media buying. Replacing leverage is performance, and the ability for marketers to gauge actual response as a result of their ads.
Of course there are Internet companies now doing upfronts, too. I think in some cases, for some key, finite inventory such as homepages and high-profile ecommerce inventory, upfronts can make sense. My issue is not with the concept of the upfront itself, but with the irrational exuberance that surrounds them in the TV arena. Upfronts should exist to satisfy the needs of the marketers as much as the needs of the content sellers, but these feel especially one-sided. They're not the end-all of a marketer's budget, and in many cases they can be the least strategic effort if you lock your entire budget into them, at a higher rate than the previous year, and aren't afforded flexibility later in the year. Upfronts have a place in the business, but the expectations needs to be reigned in a bit, more in-line with the other trends in the marketplace.
Of course, maybe it's like "practice" in Allen Iverson's eyes. Maybe we should just stop talking about it and focus on the game itself: the performance of our marketing and how it relates to driving growth. Maybe we should just stop talking about the upfronts altogether, and the exuberance will naturally fade away?
Yeah, well -- here we are years later and I'm still referencing Allen Iverson, so what do I know?
Actually, my first thought was Jim Mora's famous "Playoffs...!?!?!?" riff.
That aside, you make good and accurate points, however as someone who first heard the TV upfront characterized as a "television futures market" in the mid-1960's, I would say that for all the change since, it is still just that and as such is subject to all the rules of any classic marketplace. And unless you've ever faced the truly frightening prospect of being "shut-out" when you have a sizeable budget to place, it's difficult to understand the absolute terror that engenders among even the most experienced buyers. (The corollary among sellers, is to have sold out at below-market levels. People have lost their jobs for that!)
As with any marketplace, change, incremental or otherwise, will come when the clear consensus among marketplace participants is that the "old system" no longer serves their best interests and a system is in place that does.
You make a few good points about what SOME networks/advertisers/agencies do in the upfronts, and I know of no one from any of the positions who feels the current system is a good model. But I see your analysis as flawed on two basic fronts. First, while arguably more art than science, upfronts ensure that savvy and prescient advertisers can have the inventory they need at usually better rates. This requires some strategic vision that extends further than is often given in the digital world. Doesn't mean you won't bet wrong, or that events may change the dynamic. But auction-based just-in-time buying has many flaws, often mirroring the strengths of the current system. Second, my neighbor down the street has had several issues with drinking, probation, and the courts. However, he's not bumping Lindsay Lohan from the news. We have an inherent fascination with the rich, famous, and powerful. While there may be something in the tea leaves for a few, for most in the ad industry it's part of the gossip that keeps the water cooler more than hydration.
Years later and you're still referencing supply and demand - nothing out of date about that! When either force diminishes, expect change...but be patient. Supply and demand are mainly market driven, not technology driven. While some purchasers buy on data and can be "logicked" into action, most marketing - and most purchasing - is more complicated than that.
Isn't the expiration date on the entire networking schedule concept coming due in the foreseeable future? If people are divorced from a network schedule and choosing programs on a "want to watch now" basis why do we need networks? Won't we just have a collection of content providers making their wares available through some form of online selection process. Networks and movie studios are already morphed together. The only function of networks will be to provide a business model to finance content and that could come in many forms. Commitment to watch x number of ads, pay per view, viewing credits based upon purchases etc.
The world of programming and viewing is changing fast and the upfronts will have to change accordingly or go the way of "Must See TV."
I've worked with more than one advertiser who admitted, privately, that they like being in the upfront not only for the relative security it provides their investment, but also because the upfront purchase structure requires that significant portions of the investment be non-cancellable, ensuring the locked-in funds are no longer available to be taken out of the cookie jar by knee-jerking, burn-the-furniture-to-make-this-quarter's-numbers finance people.