Johnson & Johnson Sits Out Upfront, Nets Wait

Will Johnson & Johnson make its potentially game-changing move to skip this year's upfront an annual tactic? Maybe.

"We're going to do what's best for our business," said Brian Perkins, CMO of the pharmaceutical and packaged-goods giant, at an Advertising Week event in New York.

So far, Perkins said the decision to sit on the sidelines this summer "is working out great." But somewhat surprisingly, he said the company's delayed upfront continues.

In May, J&J sent shock waves through the industry by declaring it would postpone its upfront buying until August, partly to better align its buying process with its internal planning cycle.

But even as the new season rolls out, the buying continues. Perkins said J&J is taking advantage of the networks' increasing pledges to do business 52 weeks a year, and it's still working with broadcasters to place its dollars earmarked for the 2006-'07 season.

Early in the upfront, as other major marketers geared up to wheel and deal, J&J asked at least one network two questions: If it makes deals in late summer, will the network honor its base price--and have enough inventory left over?



Potentially, networks could sell enough inventory in the traditional upfront to allow them considerable pricing leveraging with latecomer J&J. But networks are likely to honor both of J&J's requests. Aggravating a big-spending, long-time advertiser would be risky business.

Perkins declined to comment on the issue yesterday, but said, "The networks have been terrific."

If the J&J experiment is deemed a success and the company makes upfront-skipping an annual strategy, the move signals a new era--one in which the importance of the upfront is markedly reduced. And other major marketers could follow suit.

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