ANA Tries to Undo Upfront Tradition

Networks skeptical that advertisers could cooperate on a new systemWhile sales chiefs from the major broadcast networks said last week they would be amenable to making changes in the $9 billion-plus upfront ad-buying marketplace based on the wishes of advertisers, privately they question whether every media agency and advertiser would abide by a new system.Advertisers last week spelled out their concerns about the upfront marketplace at the Association of National Advertisers' annual TV Ad Forum. The ANA released a survey that catalogued marketers' displeasure with the upfront buying process, while its president and CEO, Bob Liodice, announced the formation of a committee of advertisers to suggest ways to improve the system. The committee will seek feedback from agencies and media companies on ways to improve the system.The survey polled 165 executives from more than 75 major TV advertisers, including the Big Three U.S. automakers, Procter & Gamble, Sears, MasterCard, Bristol-Myers Squibb, Coors, General Mills, Pfizer and Wendy's. More than half of the respondents said they are "somewhat" or "very dissatisfied" with the upfront process. A mere 4 percent said they are "very satisfied."Among the changes the respondents would like to see: moving the upfront sales season from May to later in the year and establishing set hours of deal-making, to prevent the 4 a.m. negotiations of years past. The latter suggestion is aimed at reducing the possibility of mistakes and miscalculations made by tired negotiators.While complaints about the upfront process have circulated for years, this is the first time a formal committee has been set up for all parties to air their grievances. But the committee will have to tread lightly so as not to violate any federal antitrust laws. Doug Wood, an ANA attorney, said the committee—under the supervision of Kaki Hinton, vp of advertising services for Pfizer, and Perianne Grignon, director of media services for Sears, who co-chair the ANA TV Advertising Committee—will need to operate "very carefully." Once a consensus is reached, he noted, each advertiser and media agency would have to take its own action.That's exactly why network sales executives believe it will be difficult to change the system, flawed as it may be. "We'll do whatever the customers want us to do," said Mike Shaw, ABC sales president. "If [they] want us to move it, we'll move it. But I do not agree that the ad community will be in unison on these changes."Jon Nesvig, president of sales for Fox Broadcasting, was also skeptical that advertisers could unite. "Are [they] sure that one size will fit all?" he asked. "It will be a little bit like trying to herd cats." He said the pressure on media agencies to get their clients the best deals would preclude many from abiding by any negotiating rules. And he added, "If somebody comes to us with a bundle of money to spend at 2 in the morning, how do we say no?"Two other broadcast sales execs said they already have been approached by media agencies talking about doing deals before May's upfront. "How do you implement an opening and closing bell?" asked one sales exec.Another sales chief said complaints about around-the-clock negotiating are valid. "Some of our people didn't go home for two days," the source said of last year's upfront. "Thank God we didn't make any mistakes." But the sales chief, while in favor of overhauling the process, was doubtful that change is possible: "If one [agency buyer] blinks and wants to buy, I don't know how you slow down a locomotive. There's too much at stake."In the ANA survey, 55 percent of respondents said the upfront should move to August, September or October, to coincide with the formulation of ad budgets for the new year. But that could force a delay in the start of the TV season, which begins in late September.Nesvig noted that retailers would likely object to starting the season in the fourth quarter, their biggest selling season. Clients would be unlikely to agree on ideal timing, noted another sales exec: "If all advertisers took a vote, H&R Block would vote to start the season in January, soft drink companies would want it to start in the summer."Ray Warren, managing director of OMD, said one solution would be for the networks to let agencies buy a year's worth of ad time when it best suits their respective clients. "They would still be required to make a 52-week buy to get upfront guarantees, but it would take the pressure off the herd mentality," he said. "It might take a few years to implement—maybe the first year 60 percent of the advertisers would conform, the next year 70 percent and so on."Warren added that the ball is in the advertisers' court, not his. "If the clients authorize us to buy a certain way, to liberate us from the current process, we can do it," he said. But another major media buyer believes competitive pressure will preclude any cooperative spirit. "Is it a silly process right now? Absolutely," the source said. "Is it a process worth changing? Absolutely. But right now, I don't see how we can get there."

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ANA Tries to Undo Upfront Tradition

John Consoli

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