The upfront is upon us again, and there’s great speculation in the industry. Many agency executives predict cost and volume increases of a few scant points. Others, notably Viacom’s Mel Karmazin, suggest a 15-20 percent jump over last year.
There’s no shortage of prognosticators regarding what will unfold in the upfront. Many readily admit the network audience has eroded 4 to 5 percent each year, based on the continued fragmentation of media in general. Much of this has been fueled by cable TV. More recently, audience-number erosion can be attributed in part to the Internet. This presents an interesting situation. Many of the networks losing audience share have online businesses that are simultaneously gaining.
Looking at these emerging trends, I’m wondering what all you online media professionals are doing to leverage the upfront. Below, some of the things we’re thinking at my agency as the market gets ready to move.
Leveraging the Networks’ Big Ad Bucks
From an online perspective, the upfront can be viewed several different ways. Basically, we see three ways to leverage those big dollars being spent with the networks:
- Cheat sheets: Online is a value-add (publisher-side execs are reaching for the Rolaids as they read).
- Rate cards: Leverage an upfront media property commitment to establish an online rate card that will be adhered to over the course of the year (in turn, you’ll need to guarantee a certain level of spending to that online property).
- Co-negotiation: Offer incremental dollars dedicated to online, thereby securing more efficient online pricing, more efficient TV pricing, or both (those execs with the Rolaids are feeling the relief).
At our agency, we have a set of clients who largely feel the same. “We are here to spend money on TV, not the Internet. If it’s free, great. If not, forget it.”
That thinking is driven largely by organizational structure. Those in charge of overseeing a client’s broadcast commitments are not the same people in charge of overseeing a client’s Internet commitments. In many cases, there’s some degree of animosity between the two groups. Isn’t it all branded communication? But I digress…
Given the stance of the majority of our clients, we’ve had to do some creative thinking about how to leverage the upfront. For some, we’ve been drafting cheat sheets for buyers at other agencies. These consist of prioritized lists that essentially describe what we want from a given media property. We include things like timing, unique aspects of the target that are meaningful for online programs (at-home vs. at-work preference, typical customer connection speed, etc.), and other data to help a seller meaningfully focus an added-value offering for us.
We include the proper nomenclature and visual cues to ensure buyers know clearly what we want. After all, it’s unlikely the buyer or seller knows the ins and outs of Internet media. We’ve spent lots of time managing online value-add programs that are not just ineffective but completely counter to our agency’s ability to make money.
On the flip side, we recently attributed over 5 percent of total client volume over the course of a business cycle to value-added programs coming out of the upfront. With this potential, it makes lots of sense to provide the networks with some bogeys to shoot for.
The rate card scenario is the least common approach in our agency. Here’s how it works. We first assess what online property we think we’ll spend a good deal of money with in the upcoming year. We cross-tab that with TV networks that look good. Once there’s a match (hypothetically, Weather.com and The Weather Channel), we look at the rates paid over the past 6 to 12 months and adjust them down based on projected network commitments. This gets us to a place where we can begin negotiations. It ensures revenue for the online business unit, more often than not a key goal of the overall media property.
Finally, there’s co-negotiation. The client has agreed the Internet medium makes enough strategic sense that online and broadcast buyers should work in lock-step to create the deals. In this case, we’ve always had the angle figured out prior to starting anything. It could be a Super Bowl program or the Grammys. Regardless, we’ve all sat around the same table to determine the appropriate role of each medium. We can therefore clearly articulate what we want to the selling side to help them deliver results above and beyond targeted rating points (TRPs).
No matter your approach to the upfront from an online perspective, we can agree it has potential as a small springboard for online activity. If you have a moment, I’d love to hear how you plan to take advantage of this annual tradition.
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