News Articles

It's That Time Again

Upfront season set to kick off with Oxygen event 1/22/2013 09:59:17 AM Eastern

A sure sign of the season appeared in media buyers' inboxes
last week: an invitation to Oxygen Media's upfront event on Feb. 5.

"Once the calendar turns, a young man's mind turns to
thoughts of the upfront, unfortunately," says Todd Gordon, executive VP and
U.S. director for Magna Global, the media negotiating unit for agency
conglomerate Interpublic Group.

0121 Upfront chart

Media buying is a 52-week-a-year business, but the bulk of
commercials are sold during the upfront each spring. Early indications from
analysts, buyers and ad sales executives are that this year's upfront will be
much like last year's, in which advertisers committed to buy almost $9 billion
worth of ad time on broadcast and nearly $10 billion on cable.

The ink was barely dry on last year's upfront deals when
planning began in earnest for 2013. "It doesn't take long before people are saying, 'When are we going to do planning costs?'" Gordon says.

Neil Vendetti, senior VP and managing director of national
video at media agency Zenith, says: "You maybe have December to take a little
break. And now we're in the heart of pre-planning and really starting to think
about our upfront approach. It never really ends.

"We're starting to see a few program development meetings
getting scheduled," Vendetti adds. "You cringe when you see those first emails
come in."

Last year, Oxygen, part of NBCUniversal, held its upfront
event in April. This year, the network is piggybacking its upfront onto a
launch party for The Face, its new supermodel competition series.

The Face launches in February, "and we wanted to have
a launch party," says Jane Olson, senior VP of marketing and brand strategy for
Oxygen. "A lot of our clients were really interested in it, and it just seemed
like a natural. It was close enough to the upfront where we could use it as an
opportunity to get messaging out about all our programming and sort of best the
crowd in the upfront space."

The event is just part of Oxygen's upfront effort, which has
become a year-round strategy of providing information to busy media buyers and
planners in their own offices as it pumps up its reputation as a network for
reaching young female viewers.

"One of our strategies was to really speak to our agency
partners and say what kind of information are you looking for from us and how
do you want to receive it," Olson says. "The plan this year is really geared at
serving them up the kinds of things they're interested in knowing and how we
can help them be smarter and better at their jobs and doing it in a way that's
easy for them to digest."

But before things get too crazy in April and getting to
parties becomes a hassle, Oxygen hopes buyers will come to its event at the
recently reopened Marquee nightclub in Manhattan. On hand will be The Face
model-coaches Naomi Campbell, Karolína Kurková and Coco Rocha, plus a lot of
folks from the fashion world, given that Fashion Week kicks off two days later,
on Feb. 7. Personalities from other Oxygen shows will also attend. "It will be
a big red carpet," Olson says.

It might be early to try to forecast how this year's upfront
will play out, but Pivotal Research analyst Brian Wieser, a former agency
forecaster, is willing to take a shot. After surviving the fiscal cliff threat,
which would have negatively impacted the media business, advertisers are
roughly in the same place as they were last year, Wieser says.

"I think the only difference is that advertisers have a hair
trigger on their decision-making," he says. "That means nobody's really going
to know scatter till the last possible minute. But when it comes to the
upfront, it's the opposite. They're convinced they need to commit, so they
commit."

That means, like last year, most budgets will continue to be
brought forward in the upfront marketplace.

"If everything plays out as it has historically, my
benchmark is to assume it will be about a flat market for network TV," Wieser
says. And "at market suggests high single-digit price increases for the
broadcast net with the most inventory.

"As long as the economy continues to create brands that differentiate
themselves on the basis of awareness of unique attributes, there will be new
advertisers that disproportionately value broadcast network reach. And always,
the most efficient way to satisfy that goal will be packages of network TV
inventory," Wieser says.

That same dynamic should mean more money heading to cable
from big advertisers who use it to satisfy or supplement their reach goals;
they need to balance flat budgets with the fact that network TV continues to
rise in pricing, Wieser notes.

Zenith's Vendetti says he is anticipating moderate volume
growth in the upfront. "The media and ad economy is a little bit insulated from
the general economy, and one of the toughest things in a lot of cases to
explain to clients," he says.

Key issues that might affect negotiation include the growing
impact of digital video and measurement issues.

Digital video has become more important as traditional TV
ratings decline on mobile devices. "I think that if you are willing to keep
your options open and willing to play the market, then there's plenty of
eyeballs to find and plenty of value to be had," Magna's Gordon says.

Zenith expects to pay one price for eyeballs, wherever
they're watching. "Our point of view is, we have established pricing based on
our TV deals, and that's the established rate for putting an ad in that
content, and we're looking for pricing parity across screens," Vendetti says.

Networks will also be looking to monetize more delayed DVR
viewing by switching to the C7 metric, which counts commercial viewing up to
seven days after air.

"For advertisers who might not change their copy out, might
not have a retail message, or might not be trying to drive people based on a
time-sensitive event, then I think C7 is definitely a discussion that should be
happening. We've had those discussions with clients since the advent of C3,"
Vendetti says. "But I think it's obviously not a one-size-fits-all situation,
and the vendors I've spoken to understand that."

 

Alert to All Users of the Disqus commenting system:
Because of a recent global security issue, the Disqus website recommends that all users change their Disqus passwords. Here's a URL about the issue:
http://engineering.disqus.com/2014/04/10/heartbleed.html

 

April
May