Meeting Fails To Nudge Buyers, Sellers To Make Upfront Changes

The first-ever industry-wide meeting to resolve a litany of vexing upfront sales practices may also be its last. After five hours in the boardroom of a ritzy midtown Manhattan hotel that was ironically, or symbolically adjacent to the United Nations, a group of about 40 influential advertisers, agencies, network executives and their lawyers concluded an hour earlier than expected Thursday afternoon with no plans for a follow-up and without agreeing on any specific recommendations on how the upfront sales process could be made more client-friendly.

"While not a perfect process, the current processes in place were generally acceptable--were essentially optimal, and that they will continue as is," said Robert Liodice, president and chief executive officer of the Association of National Advertisers, which co-sponsored the Network Upfront Discussion Group (NUDG) with the American Association of Advertising Agencies.

The discussion focused on two aspects of the upfront that seem to stick in the craw of advertisers and agencies: The timing of the upfront, which some advertisers have said doesn't fit their fiscal years and makes it impossible to budget, and whether or not an opening and closing bell should put limits on the legendary bleary-eyed deal-making.



But like so many discussions about changing those elements of the upfront, there just wasn't any clear alternative that would work for everyone--or, it appeared, much of anyone. For all the bluster surrounding structural problems in the upfront, those who attended the meeting said that no one could find any other way to do business.

"There was more of a discussion about it being a free and open market, and that's how it operates," one executive told MediaDailyNews. While there might have been a little more heat for the broadcast networks--opinions varied about that--it was clear that in a battle between tradition and change, tradition seemed to win. Not that it would necessarily have been a fair fight. The real specter overhanging the upfront these past two years--ever higher CPMs for declining ratings--couldn't be discussed for antitrust concerns. There were lawyers in the room to make sure the talk didn't stray into those waters, though apparently everyone knew to stay away from it anyway.

"The real angst is all about rising prices, falling audiences," said O. Burtch Drake, president and chief executive officer of the AAAA. "We didn't discuss that whatsoever. That was totally off-limits."

While there were varying levels of enthusiasm about the structure of the upfront, more than a few in the room seemed to know going in that the NUDG meeting would be more talk and less action. One of the undercurrents going into the meeting--voiced privately by at least one network and several agency executives--was trying to figure out how real the desire was to look at and possibly change the upfront, or whether it was simply grandstanding. While many major advertisers, agencies, and networks did attend, there was at least one major holdout: NBC.

The NUDG meeting started off more or less on time at 10 a.m., as media executives trudged into the lobby of the Millennium UN Plaza Hotel on 44th Street across from the United Nations. For some of the participants, the prospect of talking about changes to the upfront seemed akin to a trip to the dentist. While the idea was born during the very public Television Advertising Forum sponsored by the ANA last month, no one wanted to talk publicly Thursday morning before they entered the meeting.

"They've got a press embargo on the thing," one participant explained as he rushed to the elevator. "We're not allowed to talk."

Organizers kept the expectations low going into the meeting, and spoke frankly afterward that they weren't surprised that there was no wide-ranging movement for change. The ANA's own survey--which, along with Carat North America President David Verklin's public campaigning for an upfront summit, more than anything, led to NUDG--wasn't particularly instructive about whether advertisers footing the bill knew what changes should be made to the upfront. Verklin couldn't be reached for comment Thursday afternoon.

Suggestions for a different time to break the upfront--such as the fall or, in some scenarios, twice a year--didn't go anywhere.

"It's not to say that in the end that everybody was thrilled or is absolutely satisfied, but there was not sufficient enough consensus to say that an alternative approach was better or worse," Liodice said. "If the discussions said we should start in mid-September, there were probably 22 reasons why September was not the right time to start it."

That's nothing new to most people on the network and agency side, who universally said it would be difficult to find a time for the upfront that would be acceptable to everyone. And the proposal for opening and closing bells to eliminate all-night dealing sounded a sour note.

"There was not a lot of passion for the closing bell," said one participant. "The bell idea didn't seem to be something that was viable," said another.

Drake said that the NUDG meeting was notable because it's the first time in his memory that all the stakeholders sat down to discuss the upfront. Liodice said it was unrealistic to think that a four-hour meeting was going to change the four-decade-old upfront.

And in this upfront play, there may not be a second act.

"We had tentatively scheduled May 6 if the group felt it was necessary to get together, but we felt the airing of the different points of view on the two cornerstone reasons we had agreed to talk about--we felt there was no real necessity at this stage to have another meeting," Liodice said.

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