NEW YORK The advertising industry today took a first step toward a possible modification of the television industry's annual upfront ad-buying season when the Association of National Advertisers decided to form a subcommittee that will look into ways of better meeting the needs of advertisers.
The subcommittee (which will be a unit of the ANA's TV Advertising Committee) is expected to gather executives from the major media buying agencies to discuss ideas such as moving the upfront from May to later in the year (closer to the formulation of ad budgets for the following calendar year), and eliminating the current practice of around-the-clock negotiating.
Media buyers and clients have debated making changes in the upfront buying process for years, but this is the first time that a formal committee will be established. The formation of the committee was announced at today's annual ANA Ad Forum in New York, following the release of ANA survey results from 165 advertisers, a majority of whom expressed dissatisfaction with the current upfront process.
Doug Wood, an attorney for the ANA, said such a committee would need to operate "very carefully" so as to not violate government antitrust laws, but added that it could have "an open dialogue" on the issues and "reach a consensus." At that point, each advertiser and agency would have to go out and take action independently.
The results of the ANA survey clearly show that advertisers are not happy with the upfront buying and selling process as presently constituted. Only 4 percent of respondents said they were "very satisfied" with the current upfront format, and another 20 percent said they were "somewhat satisfied." Another 58 percent said they were "somewhat" or "very dissatisfied."
Among their complaints: the timing is not in line with corporate planning of ad budgets; the process is too harried, crammed into too short a period; the TV networks have an advantage since they can gather all advertisers' budgets and "count the house" before doing business; and advertisers are being forced each year to pay CPM increases for shows that are offering declining ratings. Most advertisers surveyed said they would like to see the upfront moved to a period between August and October.
Mike Shaw, ABC sales president, and Jon Nesvig, president of sales for Fox Broadcasting, who both appeared on a panel to discuss the survey results, believe not all advertisers would abide by a change in the current process and that any changes made would continue to cause headaches for advertisers. Both alluded to unnamed advertisers or agencies who, they said, each year try to make deals before the start of the upfront process, and who insist on negotiating into the wee hours of the morning to get a jump on their competition.