• by Paul Gough , March 10, 2004

Just months before Madison Avenue tells TV networks what it really thinks of the hefty price increases of the past two years, many of the nation's biggest advertisers convened Wednesday for a session whose tone gave the impression that smart money isn't on another record upfront.

Despite the spin from some network sales executives, it wasn't hard to find examples of the simmering concern many advertisers have for the process. Presented in black and white was a survey that gave the impression that at this early stage, nearly half of advertisers are planning to vote with their feet and move money away from TV in general and network in particular.

Forty-five percent of 165 members of the Association of National Advertisers surveyed said they planned to keep their TV ad spend about the same; 37 percent said they would increase the spend, and 18 percent would cut it.

The survey was released Wednesday morning during the ANA's annual Television Advertising Forum, held in midtown Manhattan. Marketers responding to the survey ranged from under $50 billion-a-year advertisers to leaders like Procter & Gamble and Daimler Chrysler--their attitudes on the upfront and other controversial television topics. Seventy-five percent of those surveyed participate in the upfront. As might be expected, two years of record upfront price increases weighed heavily on their responses.

Three of four panelists convened to discuss the survey didn't see an up market this year, with spending either remaining the same or declining.

Forty-five percent anticipated moving money away from TV toward either other media or integrated marketing in the next year; 36 percent didn't, and 1 in 5 weren't sure yet. Top destinations: The Internet, branded entertainment, and direct marketing. Forty-two percent said they would shift dollars from network TV, with six in 10 targeting cable TV and the Internet.

"We're seeing a lot of our clients looking more and more toward the Internet as a means to communicate their messages. The Internet is generally on an upswing at this point in time," said Marc Goldstein, president and chief executive officer of MindShare North America.

Goldstein said that one reaction to higher prices--taking the money out of network and putting it elsewhere in television--may not be the best answer for everyone.

"In some cases, cable may be the best choice for our clients; in other cases it may be shoring up or beefing up a magazine commitment or a radio commitment," Goldstein said. "I think the other media sees there's an opportunity to steal some of that money that is being spoken of fleeing network television."

Betsy Lazar, general director of media operations at General Motors Corp., said she doesn't see advanced signs of erosion away from network television. But it is a longer-term trend, she added.