Commentary

Will Major Media Reviews Mean Major Upfront Headaches?

by Wayne Friedman , Staff Writer, June 1, 2015

The rash of media reviews set up by major advertisers around the same time as the upfront could throw a wrench in the works of some deals. Big-spending accounts including General Mills, Coca-Cola, L’Oreal, Unilever, Johnson & Johnson, and 21st Century Fox are in flux, making things more complex this season as incumbent media agencies look to make deals, and keep those accounts.

Some of these reviews shouldn’t come as much of a surprise -- such as Unilever, which regularly puts its media planning and buying duties into review every three years. But the sheer size of the reviews -- almost two dozen in all -- has some media executives overwhelmed.

If this isn’t enough complication, throw in former senior media agency executive Jon Mandel's recent allegations about undisclosed rebates media agencies receive from media sellers and other media-related companies.

If there is a saving grace here, it’s that this upfront should be another orderly, perhaps slow affair, with media buyers/marketers holding some leverage. Many upfront commitments can be delayed, in part; others may shift money to scatter markets -- or to other new media platforms.

A somewhat softer marketplace is anticipated. Estimates are that there could be a 10% decline in broadcast network revenues, off the $9.2 billion take of a year ago; cable network revenues may decline 4% from its $9.7 billion number.

Perhaps a key indicator will come from those traditional TV upfront players who look to move early -- autos and movie companies. Three noticeable reviews here: Volkswagen ($1 billion in billings); BMW $150 million); and Fox ($1 billion).

Regarding movie companies like Fox, this category has traditionally been among the first marketers to move in the upfront -- all to secure key programming time slots for big franchise movies, especially in summer. In return, TV networks grab premium pricing from movie studios.

Media agency executives aren’t concerned as yet -- but perhaps distracted. Irwin Gotlieb, global chairman of GroupM, told Adweek: "For those of us who make markets, our attention is being diverted unnecessarily."

tv, upfront

3 comments about "Will Major Media Reviews Mean Major Upfront Headaches?".

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cara marcano from reporte hispano, June 1, 2015 at 2:13 p.m.
Upfronts do seem a bit dated and unnecessary.
For the movie companies there is some great research about why they might still work and we have seen this in working with some clients.
For example in Hispanic we see great work with recruitment ratios as an indicator of which film should be invested in from a media and marketing point of view. In Hispanic marketing of films for example, we see that if too many folks had to be asked to come to a screening -- if the recruitment ratio is too high- it might not be that film that we want our client investing against in terms of their media dollars for #ROI and yes with these ratios we can advise further ahead of time.
Advertising is stil so incredibly valuable at driving sales if the budgets are correct and the focus is correct relative to the target's potential and the product, i.e. a particular film.
Definitely worth a conversation about the #WHY - #Why do we do upfronts, what is their history, how could they be done better at #ROI and #sales growth for our clients and do they result in too much Network TV media buying that is better spent in print and higher-quality digital, in investing in more exclusive digital opportunities and better content marketing etc., marketing and media for experiences, events and more innovation in the media creative itself. Not higher spends necessarily just spends better utilized and perhaps with more testing and more flexibility and with closer integration of PR and marketing silos.

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dorothy higgins from Mediabrands WW, June 2, 2015 at 10:44 a.m.

The disruption is so much more wide-spread than the upfronts. All of the media agency personnel who work on these accounts and are distracted by the pitches as well as those who are pulled in to pitch on those potential new businesses in review are the unheralded heros of this tumult....if they survive.

Ed Papazian from Media Dynamics Inc, June 2, 2015 at 3:58 p.m.

I doubt that any major upfront advertiser, with one or more AORs set to buy for the 2015-16 TV season would jeopardize that activity by an immediately disruptive media review. Such reviews are somewhat drawn out, ableit tedious and often wheel spinning affairs, with assignments for the upcoming year and beyond at play. Also, the incumbents ---who are engaged in the current upfront---may be among the last to be heard from, following pitches by wannabies and, of course, "independednt evaluations" by consultants.