Message To Digital Advertisers, Agencies: Stay Out of the Upfront Trap

Despite the $9 billion spent during this year's upfront, many feel that this model is flawed and resent having to participate. Given the upfront's limitations, why would agencies or clients extend this model to other media? And yet that's exactly what's happening with online and emerging media.

We all know the problems of participating in the upfront--and also the inherent fears of not taking part. Clients and agencies alike have to allocate appropriate budget levels to national TV very far in advance--despite the fact that most clients do not even know what their total media budget will be when the upfront occurs. Of course, no advertiser can afford to pay higher increases than are necessary, and scatter pricing is traditionally (although not always) higher than upfront pricing. And if you don't buy in the upfront, there is no guarantee you will be able to run in that great hit show. Because demand generally exceeds supply, there is too much risk, particularly for large advertisers, to sit on the sidelines and wait to see what the scatter market will deliver.



Some brave companies, like Johnson & Johnson, are beginning to look fear in the eye and move away from the upfront model, announcing that it is no longer participating in order to more strategically target its media spending. Coca-Cola has also said it will pass. Even NBC Universal Television Group President and COO Randy Falco indicated during a news conference to unveil the network's new primetime schedule that the upfront is losing some importance as clients focus on breakthrough ideas in alternative media.

Given this apparent unraveling of the broadcast upfront model, why are media planners and buyers entertaining the notion of upfront deals in emerging media, such as broadband video, mobile applications, video-on-demand, and in-flight advertising? A perfect example of this is MTV Networks, which estimates that up to eight percent of its upfront take will go toward digital platforms like broadband and mobile. Other advertisers are following this model and packaging online with TV.

In addition, some online sites that are not affiliated with TV properties are trying to jump on the upfront bandwagon as well. There is plenty of inventory available in these areas, so the supply-and-demand rules that drive the network TV upfront do not apply.

While it makes perfect sense for vendors to lock in deals and revenue, for agencies and clients it's like hitting a golf ball out of a sand trap. Hitting a perfect shot near the hole or even getting the ball on the green is more difficult in an upfront model for emerging media, since it requires the commitment of annual budgets without truly understanding the value of those investments. If you do get the "ball on the green," it is more likely luck than skill.

For example, many companies have tested broadband video pre-rolls, and this vehicle looks promising based on initial clickthrough rates. But how many clients have tracked clicks to a sale, or a comparable back-end metric to other media? My guess is, not many. It is simply too early to fully understand the impact on back-end results for many of these emerging media platforms.

The notion of being touted in the press or perceived by our clients and the industry as cutting-edge may be clouding our judgment in this area. Let's stay away from the upfront model now before it becomes entrenched in the way we do business. Why elect to hit out of the sand trap, when we can continue to hit off the fairway?

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