The annual ritual of the upfront can be a confusing affair for those on the outside looking in. An experienced guide is needed to pick out winners and losers as deals worth billions of dollars get made over cold pizza.
Call Joe Abruzzese the President of the Upfronts, Emeritus. He has forgotten more about the upfronts than most people know because for more than 30 years, the dapper Abruzzese was in the thick of it, running ad sales first for CBS and then for Discovery Communications.
B&C asked Abruzzese — who retired from Discovery last year and is on the board of Raze, which produces content for the Latino market — to share a few things that every buyer and salesman ought to know about the upfront. Here he drops some knowledge and provides a few tricks for deciphering what will be going on once the presentations stop and the negotiations begin. So pay attention.
1. The upfront continues to work for both parties, or else it would not be around after 40-plus years.
2. It continues to be valuable for clients who can buy prime inventory at the best price of the year, since scatter for the most part is higher than upfront rates.
3. The upfront is only a piece of the media equation. No one should ever claim victory after the upfront. It would be like declaring victory after the sixth inning of a baseball game. The real victory is when the media companies announce their quarterly earnings and state the increase in media sales.
4. The upfront used to be an indicator of future economic health — or at least the health of the media business. Now it's just about how much money is being released for future media. That’s it.
5. Quarterly dollars can give a misleading read on the strength of the upfront. Out-quarter spending can give a false positive of strength since most is cancellable.
6. The only thing that can jeopardize the upfront would be for scatter rates to fall way below upfront rates for quality inventory; or for enough money to be diverted to other media such as Facebook and Google. Maybe add in Amazon and Hulu. Or digital in general.
7. There is a lot more time spent in preparing for the upfront than the actual negotiations.
8. There is a lot more waiting for submissions than actual negotiations during the upfront — thus the cold pizza.
9. Cold pizza is not so bad.
10. There is a much better chance of keeping upfront dollars in the books than waiting for scatter to develop.
11. There is one thing that is the prime mover during the upfront: Trust. No one writes the deals down and if they did they wouldn't be worth the paper they were written on.
12. It's still a repeat business. And at the end, the buyer and seller have to execute the deal all year long and face each other year after year.
13. A deal can always be struck the next day that was on the table the night before — no matter what the threat is.
14. The sellers don't actually stop the upfront. It usually stops by itself.
15. No one actually gets better than market. With all the consolidation of media, that is almost impossible.
16. What should be recognized is that after the upfront negotiations are done the real work starts for the agencies as they have to present to their client the media buys they have agreed to.