• by May 22, 2003

Imagine if you will, a different world for buying TV advertising than the current upfront market. Imagine a world with no glitzy presentations, no predictions of great ratings success, no swag, and no all night pajama parties haggling for the best rate. In other words, imagine that there were no upfront TV market as we know it.

"It still wouldn't go away," said Susan McClennan, national media manager for Empower Media Marketing in Cincinnati. "There are too many big players and too many big categories that need a process like the upfront. Look at automotive. Look at entertainment. The only way for them to get what they want is to secure everything they can as early as possible. If the upfront were done away with, some companies would still want to do their side deals, and buy upfront."

Love it or hate it, the upfront market and the upfront process are here to stay. McClennan and her colleagues all display mixed emotions about the process. They would like to buy TV time when their marketing plans, for certain categories and clients, are more complete, but often times they can't. Upfront pressure forces their hands. It's a rat race, but it's also an efficient way to buy media. You get one time to buy for one client at one rate for an entire season of shows.

"It does have its efficiencies, but those efficiencies are much more in favor of the sellers than the buyers this year," said Deutsch chief media officer Peter Gardiner. "As the years have gone by, it has become tougher to deal with the upfront as a way to achieve the needs of your clients. The strategy that was set in May, could be different in October when the spots you purchased at the upfront are scheduled to run. We have to find a way to make this process work better for the strategic plans of our clients."

"Knowing your client's marketing plans and then negotiating an advertising deal would be much more logical than the current process," said Murray Dudgeon, senior VP at Universal-McCann.

Gardiner expresses some of the new realities of this year's upfront process. The first one: networks are holding all the good cards. Executive teams across the board have been largely consistent. Viacom's Karmazin-Redstone feud seems to have quieted. A transfer of power at NBC seems to have gone smoothly. Fox continues to be the wildcard with a good hold on the 18 to 34 segment. The WB has the "kid" market. The former big three have the rights to big event shows and big event sports that advertisers desire to communicate their sales and branding programs.

Weeks ago, executives like Mel Karmazin at Viacom were predicting 20 percent rate increases for the upfront. It's doubtful he'll get that, but most agency buyers will admit that networks are in a good spot this year. The unstable economy and geopolitical situation have driven clients back to TV in a big way. So the big deals and checks for automotive and entertainment will most likely again drive this year's upfront.

"You miss the market and you're in big trouble," said one buyer who requested anonymity. "This year there's a chance you'll miss the market if you don't act first and fast."

The New Upfront "Reality"

Another new climate of the upfront may be a test for the networks this year, and that reality is reality TV. Sources say 70 percent of ABC's new shows are reality-based, with next summer's primetime lineup to be predominately reality shows. Many buyers are not comfortable with the money they are spending on the upfront because they are not confident on the quality of these shows. They also feel that the whole genre could be headed for a quick consumer burnout.

"I think it gives the networks a short ticket to ride," said Nancy McClennan. "It's a lot like the game show phases that we went through a few years ago. It feels like the networks are just throwing a lot of things against the wall to see what sticks."

Other agency executives see more possibilities on the reality genre. "It is delivering eyeballs," says Murray Dudgeon. "The great thing about it is that you can do so much more with it. The amount of shows that will come out next year will not be sustainable. You'll have your American Idols and you'll have your duds. But you can get much more involved in product placement, and if you should pick a winner, you are getting in early on a great success."

Welcome to the 52-Week Season

Many of the new reality programs will either be introduced in the summer season, or debuts will reach a climax during the summer season. Having anything at all happen after Memorial Day is good news to broadcasters.

Broadcasters, who bleed red during the summer, have been trying to figure out ways to stem the flow. When networks are willing and able to run fresh programming in the summer, these shows are often among the season's biggest hits even if they haven't been pitched in the upfront. The fresh-programming strategy is touted by networks that are desperate to regain the market share they lose every time the weather gets warmer. Premiering shows in the summer might undercut the upfront, but it also might road test a winner. And networks want to figure out a way to keep viewers from going to cable, which had already learned long ago that having fresh programming in the summer boosts ratings.

"They want to recapture those viewers. Our business is becoming a 52-week business," said Bill Cella, CEO of Interpublic buying firm Magna Global. It's all an effort to stem what has been a truism since the first days of TV. This effort was aided and abetted by both the broadcast networks and the ratings systems that pushed the idea of sweeps culminating in a final season blitz during May. Tim Brooks, SVP of research at Lifetime Television, said the networks haven't helped their cause by heavily promoting the May sweeps shows as being the last new episodes until the fall. Brooks said they say, in effect, "This is our finale for the season, you can go home now."

Fox might have started the trend in the late 1980s with the debut of Beverly Hills 90210 and Melrose Place. But it didn't really catch on until the late 1990s, when Who Wants to be a Millionaire went from place-filler to table-setter. Every network has mined that same formula since then, from CBS with Survivor to NBC with Fear Factor and Fox's monster hit, American Idol. Fox is trying for the magic again this year, with plans to premiere at least one sitcom a month beginning in June as a run-up to its fall schedule.

Unlike the other networks, Fox has a bowling ball go through its schedule every fall when it sticks by its wall-to-wall coverage of postseason baseball. Promising shows that premiered in September and then went off the air for a month simply couldn't recover. Count girls club and Fastlane among those last season's victims.

"We're in the unique position, having a month, October, when we're pretty much going wire to wire with baseball. Having it makes it more difficult to get a schedule going," said Preston Beckman, EVP of strategic program planning at Fox. "Because we have to stop our schedule for a month in October, there may be opportunities to get a fall show on early ... get it going in the summer, so that when it's pre-empted for possibly a month, it's built up a following so when we bring it back, we don't think it's starting from scratch," Beckman said.

Living with the 52-Week Reality

Fox makes no secret of the fact they're moving toward the creation of a 52-week schedule. And that's just fine with planners, buyers, and advertisers. They want to maintain what Magna Global's Bill Cella has referred to as "Repeatville".

"Advertisers in general love that. It's a good alternative versus just the repeated programming," said Steve Kalb, VP/director of broadcast buying at Mullen in Wenham, Massachusetts. He remembers launching a client in primetime last summer, and then finding it difficult to find some high-impact numbers within all the repeats. He said the advertisers and agencies would welcome fresh programming in the summer, even if it were simply a jump-start for the fall.

Brooks said the previous drop in summer viewership among TV networks wasn't because no one wanted to watch TV. "It was because there wasn't anything to watch. You put on shows, and viewership will rebound. Broadcasters hadn't done that, and this gave cable a golden opportunity," Brooks said. Another new reality in this year's upfront is the consistent strength of Fox and The WB Network. Not only do the Big Three have to worry about cable, but now they've got to worry about these up-and-comers. The planners and buyers like it.

"The choices are extraordinary. It's a great opportunity for a buyer to go out and pick and choose," added Bill Cella.

The WB has come into its own to become a must-buy for anyone trying to target the 12 to 24 viewer group. And Fox, whose schedule suffered in the beginning of the season because of its baseball commitments, uncovered American Idol and Joe Millionaire, and ended up winning the February sweeps in the Adult 18 to 49 group. Fox is now running neck-and-neck with perennial leader NBC for a season win in that very demo, a feat that seemed impossible a few years ago.

The Upside to the Upfront

In 2002, The WB had a great upfront and turned a profit for the first time in its ten-year history. It's also made tremendous inroads as the place for advertisers to reach the 12 to 24 and 18 to 24 demographics and particularly young women with shows like Gilmore Girls, Smallville and Seventh Heaven.

"They're a force in the marketplace. The WB has created a very loyal niche for young people watching their network. They've got a very desirable environment for advertisers to be a part of," said Bill Cella, CEO of Interpublic buying firm, Magna Global USA. He said The WB sold out in short order during last year's upfront and became a "must-have" for movie companies.

"The WB tends to go out with the upfront quickly. Entertainment companies run to them first," said Steve Kalb, VP/director of national broadcast at Mullen.

Keith Marder, a spokesman for The WB, said the network's focus on younger demographics, and scripted programming, along with the stability of its schedule attracts advertisers. They also know they can get the 12 to 34 group without having to pay for a lot of the 18 to 49 they might be getting with other networks. Most of The WB's guarantees are against 18 to 34. The network also does well with the 12 to 17 group, recruiting the next generation of viewers and keeping its median age young.

"We've got a unique position in the marketplace, and more and more people are seeing this as an important part of their mix," Marder said.

Both Kalb and Cella praised The WB for its emphasis on scripted programming. The WB reaches the younger demographic without dipping into the reality well as much as other networks have had to. Cella said The WB is building a strong foundation, and that scripted programming is going to be good in the long run.

"The future of their business is scripted programming. I think all the network people would like to see strong scripted programming and less reality. Some reality is fine but their true feeling is that they're in the scripted business. Reality-based programming, too much of it, can work against them," said Cella.

Fox has performed its rating miracles in a different way. This season, about 24 percent of its schedule has been reality-based. This has shot them to the top of the ratings with Joe Millionaire and American Idol
. And, it's helped them promote other shows like 24, increasing sampling rates and bringing in more female viewers.