The New World5/12/2006 08:00:00 PM Eastern
Predictions are plucked annually from the ether that the upfront market is going away. We don't think so, but as upfront week unfolds, it is obvious that advertisers and content distributors are working toward a new business model.
For reach and frequency, we're certain broadcasting and cable still rule the ad dollar. But the emergence of new platforms will change what advertisers expect and what their ad dollars can do. Wherever those dollars migrate, cable and broadcast networks need to be there to collect them.
This upfront comes equipped with perplexing options. There are new-media platforms to consider. There are two networks that have folded and two others that have been created. There's a new Nielsen ratings system that makes the accuracy or relevance of viewership statistics even harder to decipher.
There is, in fact, a public that is as splintered as a cable lineup. The fact that television continues to create mass-appeal programs like American Idol, Desperate Housewives and even Deal or No Deal is more amazing every time one of those hits emerges, because grabbing millions of viewers has never been harder.
In the marketplace itself, consumers don't seem particularly confident, even though the economy has grown at a 4.8% clip so far this year, the best in 2½ years. Unemployment is down, but a survey says about a third of all Americans fear being laid off. Then there's the billions a month we are spending on a war whose end is not clearly in sight.
Retail sales are not horrible, despite the fact that gasoline prices and rising interest rates ought to grind down consumers any day now. We see that Anheuser-Busch is reconsidering its pricing strategy. Affluent quaffers may not care about gas selling for $3 a gallon, but regular Joes might have to give up some kind of guzzling.
We suspect, in this upfront, many advertisers and buyers are going to sit tight and watch what happens—with the economy, with the new networks, with Nielsen.
Marc Goldstein, the CEO of MindShare North America, which placed more than $10 billion of advertising last year, tells B&C that his firm is going to hold back money to see where the viewers go.
He's also going to spend a little pocket money on multiplatform deals, like a gambler at the track with a little extra change betting on a long shot just because he likes the way it looked in warm-ups.
So the ingredients are caution and risk. The challenge for advertisers, agencies and programmers is to find the formula that will turn the blinding blur of new technology into a golden opportunity.