Upfront Hits the Wall

Questions loomed over the various upfront presentations in New York last week as buyers expressed uncertainty over upcoming negotiations with the networks.While most buyers conceded upfront spending in every ad category, from cars to major appliances, will be down from last year's $8.1 billion to a projected $7.3 billion -- a 9.8 percent decrease -- no one had a clear idea from which category the available dollars will come. One prediction that appears to be coming true, however: This will be the slowest-moving upfront in recent memory and perhaps the longest ever.Of last year's top five categories -- automobiles, national restaurants, movies, telecoms and pharmaceuticals, in that order -- only the booming pharmaceutical category appears to be as strong in the upfront as 2000, many buyers said."We haven't been able to identify any category that won't be down," said the head of a media agency with major clients in most of the Top 10 categories. "We expect a significant, 10-15 per cent shortfall in upfront budgets."For certain advertisers, such as the film and auto industries, which are constantly churning out new products, Howard Nass, TN Media director of national broadcast, wondered if these marketers can afford to adjust their ad budgets downward."A movie has to break out against the competition within a very short window and doesn't have the luxury of building brand awareness incrementally," he said. "And with the soft ness in the auto industry, car makers have to flush through the existing inventory to make room for new models."But for everyone, the watchword was "patience." Even a national buyer with pharmaceutical clients urged caution with a goal toward maintaining flexibility in the marketplace."[Instead of massive upfront buying], there'll be a mix of network and scatter buying, especially for borderline advertisers spending $50 million or so in the upfront," the buyer said.Another buyer noted clients are hedging their bets that pricing in the scatter market will be only slightly higher than at the upfront, rather than the usual 10 percent or more -- perhaps as little as 3 percent. And he said that at least one client who felt burned on pricing by last year's upfront has decided not to participate this year at all."Frankly, we haven't pressured our clients to get started on the upfront; in fact, we've indicated that they can wait," said the head buyer for another major agency.Despite earlier statements about withholding inventory unless prices are met, Joe Abruzzese, CBS president of ad sales, joked last week at the network's presentation that "we may be doing upfront in August."Uncertainty over how and when the upfront will end has put things in the advertisers' favor, said Tim Spengler, director of national broadcast for Initiative Media."The agencies have firm indications from our clients regarding how much they're prepared to spend," he said. "The networks don't seem willing to concede until we submit the budgets. ... The uncertainty isn't centered on where things are, but where they're headed longer term."

Brand Marketing

Upfront Hits the Wall

David Kaplan

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David Kaplan