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Media Execs Readying for Unpredictable Upfront


Second quarter scatter ad sales are often used as metaphoric tea leaves for predicting how robust (or not) the television upfront marketplace will be.
This year, however, no tea leaves will be necessary, according to Kris Magel, executive vp and director of national broadcast, Initiative. “The money will be down,” said Magel, one of  several media agency executives offering their points of view on likely 2009 spending trends during last week’s Mediaweek Upfront Conference in New York.
How much the market will be down is less certain, said Magel. Overall, TV spending for the year will decline eight to 10 percent, he said. “The upfront could be above or below that depending on the mentality for pricing and flexibility.”
Others on the panel agreed that the current recession, the worst, some say, since the Great Depression of the 1930s, makes it more difficult than ever to predict how marketers will allocate their spending budgets this year.  
“We don’t have a good handle on third-quarter options or spending let alone the upfront,” said Gibbs Haljun, managing director, media investment, North America, WPP’s Mediaedge:cia. “For those advertisers that have advertising as a percent of sales, our gut tells us there will be reduced dollars across the board.” But how those cuts are applied will vary from client to client, he said.
Magel agreed adding that “money is coming in week to week steadily, but it’s not projectable. It’s not clear if June is going to fill up. Cancellation options are more significant in the second quarter versus the first quarter.”

And the idea that week-to-week spending is possible could have some impact on the mentality of the upfront, Magel said. “Advertisers aren’t paying a premium for this flexibility, so if upfront discounts aren’t there [as they expect]...they might not spend all of their money or any of their money.”
Chris Geraci, managing director, national broadcast, OMD, described current scatter sales activity as a “steady trickle” that “reflects the cautions that most marketers have with any expenditures at this point. There are more controls in place, and budgets are getting approved closer to when the dollars are actually needed.”
Carrie Drinkwater, senior vp and co-director of national broadcast at Havas’ MPG said that “what’s going on today in the market hopefully is not indicative of what will occur next year. Every client has to take a look at their own model and budget and develop a strategy. “
The buyers also said that it is difficult to generalize about the health of broad ad categories. “You need to break it down,” said Haljun. “In financial, there is weakness in the banking sector, but insurance is not weak. You need to drive down to see where the opportunities are.”
Drinkwater said that some clients—she cited Autozone as one example—have jumped into the network market more aggressively than ever to take advantage of current opportunities, and as a result, are generating significantly more business.
And for all the buzz around online video, the panel said there are numerous problems tied to packaging online and on-air inventory. “It’s a different mindset,” said Geraci, and the lack of metrics that would help buyers better assess the value of online video ads vis-a-vis TV spots has been an impediment to executing cross-platform deals. “Anybody who says they are delivering a television communications goal online is making it up pretty much,” he said. “Everybody is trying to get there but nobody is there yet.”

Still, said Drinkwater, online video is a huge opportunity for marketers and programmers, given the fact that approximately 85 percent of the online viewing is by viewers following content from the television platform. “If they are that passionate,” she said, the platform needs to be extended so marketers can “reach them in effective and creative ways.”
Haljun also stressed the need for better metrics. “We need to understand how, if I’m watching online versus TV how the viewing experience is or isn’t comparable and how they are building reach off each to push online to the next level,” he said.
Added Magel: “We need to do a lot of work laying down evaluation metrics,” such as how likely a viewer is to be watching spots online, where there is less clutter than on the air, or the impact of watching on a 60-inch HD TV screen versus a 14-inch computer screen. “We have to add all those things together to come up with a value we think each of these environments has and a basis for comparing them,” he said.
The panelists also agreed that it’s put up or shut up time for the TV industry with regard to never-ending promises to deliver addressable advertising capability on a mass scale. “Personally I’m tired of testing this,” said OMD’s Geraci. “It’s gone on too long.” While he commended the work that the cable MSO venture Canoe is doing, Geraci said he was “pretty underwhelmed,” after a recent briefing of what the venture has to offer in the near term. “They’re headed in the right direction,” he said.
While cable isn’t there yet, Drinkwater said addressable video platforms exist online, “right now, it’s part of our day to day.”
In fairness to cable, said Magel, clients need to step up as well. “If clients don’t start dropping millions into it, it’s never going anywhere,” he said.
As to currency, panelists said the two-year old C3 ratings system that combines average commercial minute tallies with 3 days of DVR playback is likely to be around for awhile. “We don’t see a need to change,” said Haljun.

For Geraci, the question is whether the industry wants to introduce a new variable dealing with “the value of positions within a commercial pod.”
Magel said he’d like to see the industry move to a “more granular currency,” that would indicate the different rating levels for spots within the same program, but acknowledged the myriad issues of getting the industry to move in that direction.
While it's not perfect, noted Drinkwater, the current system is far more revealing about the TV audience than other currencies are for any other medium.





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