• by May 17, 2004

WILL THE UPFRONT BE HALF EMPTY, OR JUST HALF FULL-OF-IT? - The Wall Street Journal got it wrong again. It's not "talk" that's cheap in the days leading up to the upfront advertising marketplace. It's news stories portending to foretell what's about to happen. According to the ad column in today's Journal, what's about to happen is the defection of major advertisers from network TV to other media options. Citing a shift in thinking among markers like American Express and Procter & Gamble, the Journal projects network upfront ad sales would rise only 3 percent. That's not markedly different from the 3-5 percent today's New York Times ad column suggests that prime-time network upfront ad sales might grow this year, but the perspective of the two papers couldn't be more different. While the headline on the Times' column reads "More Money for Broadcast Networks," the Journal's reads "For Big Marketers Like AmEx, TV Ads Lose Starring Role."

But as bad as the disconnect is between those two papers, it's the rift among the trade press predictions that's really wide. According to Advertising Age, the network upfront will grow 3 percent this year. According to Adweek/Mediaweek/Brandweek, it will decline "3-5%."

The reality is that some major marketers have already moved away from network TV in general and the upfront in particular. American Express, for example, now spends only 35 percent of its ad budget on TV, down from 80 percent just ten years ago. Apparently, AmEx doesn't think TV advertising is priceless. The Journal goes on to point out that P&G also is rethinking its media mix with an eye toward diminishing its dependency on TV advertising. While that's not exactly a news flash, it is part of an ongoing process that actually speaks to the increasing value of network TV, not decreasing.

Another not so big news flash, is Deutsch's revelation that it is "redefining" primetime to "consumer primetime." Whatever. There's been plenty of research to show that consumers no longer look at the hours of 8- 11 p.m. (7-11 on Sunday) on the major broadcast networks as their "prime time." The Cabletelevision Advertising Bureau's and Knowledge Networks/SRI's research bears that out. It found that "late night" is the primetime for young men, and we'll tell you that weekend mornings have become the primetime for the Riff. It's the only time we get the tube to ourselves and we're usually using it to watch something on our TiVo hard drive that was recorded from a more primal time. It seems Deutsch has learned something that most big media shops learned some time ago, that dayparts are growing increasingly meaningless and that it's all about following the consumer to what they want to watch, when and where they want to watch it.

The reason some big marketers are shifting out of the medium is because it is becoming too valuable and they cannot afford to sustain their historic positions. While some might think that would suggest a correction is looming for TV advertising, especially the upfront, it ignores the fact that some of the biggest users of the medium tend to be price elastic, such as automobile and movie marketers. It also ignores the fact that the number of advertisers and brands buying TV continues to expand, increasing overall demand for the medium.

Ultimately, the network primetime marketplace should correct itself. In fact, it probably did during the 2003-04 season, but most people didn't notice it. While sales rose 9 percent during the 2003-04 upfront, actual primetime revenues are estimated to have rise only about 1 percent. So the real question is, what's the value of upfront sales estimates, which are known to be exaggerations, spin and, after all is said and done, and they're finally booked, cancelled, optioned and made-good on, ultimately prove to be a fraction of what the ad columns report going in.

Anyway, for those of you who haven't been keeping tabs, here's what the Riff has compiled so far. The primetime upfront could be up - or down - as much as 5 percent.

2004-05 Upfront Network Prime-Time Sales Prognostications

                   Prime-Time       Cable  Syndication
Spanish TV 
Wall Street Journal       +3%          NA           NA          NA 
New York Times          +3-5%  +7.3-12.7%         +10%        +43% 
Adweek                  -3-5%          NA
NA          NA 
Advertising Age           +3%   +7.3-9.1%           NA          NA 
Los Angeles Times       +2.0%          NA           NA          NA 

Source: Publications, attributed to various sources.