• by Joe Mandese , June 20, 2006

Few things are watched more closely by us at TV Watch than the way the TV industry press watches TV's annual upfront advertising marketplace. How the trade press covers the upfront goes a long way toward shaping perceptions of upfront advertising demand. It's always a moving target for reporters who must piece the big picture together by talking - largely off-the-record - to media buyers and network sales execs, with few if any publicly accountable bits of information to work on. This year appears to be especially problematic, with reliable information harder to come by than ever before. At least that's the way Mediaweek reported Monday when it characterized 2006-07 as "the slowest-paced and most secretly negotiated broadcast television upfront in years." Curiously, it went on to predict that the market would "wrap up this week," well ahead of July 4th Weekend. Historically, network upfront markets have wrapped up between Memorial Day and July 4th weekends, though during the more bullish years, its moved earlier and earlier.

More telling is Mediaweek's suggestion that this year's deals have been more secretly negotiated than in the past. Generally speaking, networks and media buyers don't comment publicly on their deals, though there have been occasional press releases issued in the past. In fact, the 2006-07 action got underway with a press release issued not by a broadcast network, but by MTV Networks and ad agency OMD, on what was reported to be the first upfront deal of the season.

That aside, there has been a fair amount of public comment about one aspect of this year's negotiations: the decision not to use Nielsen's time-shifted ratings as part of upfront ad guarantees. Buyers at major agencies have been quite vocal about that, and ABC even issued a public statement about it.

Interestingly, that decision likely will have a far greater impact on the economics of the network upfront over the long-term than any of this year's price negotiations or budget commitments. DVR penetration may still be relatively small in Nielsen's sample, and in the U.S. TV universe, but it is expected to grow over time. And recent Nielsen data shows that as much as 18 percent of prime-time viewing is done on a time-shifted basis - "viewing" that the networks will reap no benefit from during this year's or future upfront ad deals, now that that precedent has been established. Kudos to Madison Avenue for digging its heels in on that one.

The reality is that the 2006-07 upfront has been a candidly public one, not more clandestine than in recent years. If you doubt that, you should check out Advertising Age's coverage, which ticks off a litany of estimates from high-profile executives on their networks upfront performance, including Walt Disney Co.'s Tom Staggs and News Corp.'s Peter Chernin. CBS chief Leslie Moonves also has been fairly candid about the upfront, and has even been candid about how heavily it is spun. "It's a very interesting PR thing that goes on where the advertisers always say, 'Down CPMs' and we always say, 'Oh no, way up,'" he said. "And the truth is somewhere in the middle," reported MediaDailyNews.

Clearly, upfront spin watching is almost as big a sport as upfront deal making. If you doubt that, check out this story on NBC's sagging upfront market performance. It ran Monday in, of all places, China's Shanghai Daily.