John Muszynski, CEO of Publicis Groupe's Starcom, had a unique vantage point during this year's upfront market, simultaneously overseeing the buying (in place of svp, director of broadcast investment Elizabeth Herbst Brady, who left in the spring) and running the agency. In a conversation with Adweek, Muszynski discusses what was different about this year's upfront, the switch to commercial ratings, reducing clutter, and where the industry is headed as it tries to keep pace with consumers.
Adweek: What's your assessment of how this year's upfront played out in terms of money spent?
John Muszynski: I think that anybody who looks at this as anything other than down is missing the mark. The money was down.
AW: How much?
Muszynski: That's a really tough question because, frankly, the broadcast and cable companies did not have a real good gauge on where budgets were going, and they were sort of caught off guard. The budgets were provided to us much later in the process, and they realized late that the market really wasn't that strong. They have been very tight-lipped on providing information. Frankly, you look at the information, and I don't know what I can believe or not.
AW: Is the process evolving in a way that serves clients better? How is it changing?
Muszynski: What has really changed is the marketplace, and this year in particular we had some really distinct changes [there]. That's what we should be focusing on, not the upfront process.
AW: But you yourself have called for a video upfront. Isn't that a process?
Muszynski: No, it's not. What I've said to the vendors is I'm not just looking at television. I'm looking at the consumer and I'm going to move my dollars to the consumer. Don't expect me to have TV budgets. I have video budgets, and if you don't want to provide me video opportunities outside of television, you're not going to get the same dollars that you got before.
AW: So how did the marketplace change?
Muszynski: Because the market had less demand, like it has for the past couple of years, the necessity to move money during the upfront is not as great as it used to be. So clients who need the flexibility who don't want to be forced into making decisions 15 or 16 months out have the ability to delay their decisions. We saw that as a very significant change in terms of gathering budgets.
AW: How so?
Muszynski: Normally we start to get a pretty good handle on budgets [by the] end of March or early April. The fact was most of the budget information we were gaining came in around the first week of May. All the decisions seemed to be pushed back. And there's no penalty in doing that right now, so marketers delayed it.
AW: What's driving that?
Muszynski: A number of [factors]. The money is spread out over more players and a number of different vehicles, and in some cases, category spending was down.
AW: So the demand pressure is not there, meaning that buyers can pretty much spend their money when they want to?
Muszynski: Yes. I've got certain clients where we've gone in and spent money in a particular quarter on four different occasions. There's not enough money in the marketplace to absorb all the inventory. So as a marketer, why commit everything if you're not certain what your needs are going to be? That's the No. 1 change that I saw.
AW: Are the days of the weeklong upfront gone?
Muszynski: It's a 365-day market and a 52-week upfront. There is no way we do this business in a week or even three or four weeks. Period. This is a year-round process. The best opportunities and programs that I have in place for my clients take a significant amount of time. They don't all coincide with the calendar. It's amazing how the consumer really doesn't care about the upfront season, and the opportunities often become available in September or December or March, not just in May and June.
AW: That's true for your clients, but what about the industry? Is the market as a whole evolving that way?
Muszynski: Yes it is, and it will continue to do so over time. If the networks are going to give you an honest response, they would say the same thing. The upfront is a smaller part of their overall business than it ever has been. They sell more in scatter now than they ever have. It's not because people don't like the upfront. It's because they need the flexibility and they want the opportunity to delay their decisions, and they don't get penalized from a price standpoint because of the lack of demand in the marketplace.
AW: You attended the Microsoft AdCenter summit in May. What was your big takeaway?
Muszynski: Wow, is there some competition in the space. And it's interesting to see how they're all trying to put a game plan together. And the real positive I took away is that Microsoft, Google and others are really truly looking at what the consumer wants rather than just saying, "Here's what my technology can do." The technology is being driven by consumer needs.
AW: More than ever this year advertisers have talked about using non-TV options to get their messages out. Why?
Muszynski: I think the reason everybody is looking at other options is because the consumer isn't happy with the way things have been going. They don't really care if its television or broadband or print. They want their content. And when they find their content, they move it. The marketers are just following the consumer. But everyone keeps talking about how TV is dead and the upfront is dead. We need to start paying attention to what's happening, the behavior changes.
AW: The TV networks talked a lot about following consumers as well with an array of digital assets. How do those assets measure up?
Muszynski: They've done an admirable job of changing the way they approach things beyond television. Are they there yet? Absolutely not. But they all have made a concerted effort to invest money and to put it in areas other than traditional television.
AW: Who's doing the best job in that area?
Muszynski: They all need to go a lot further. But they're all making an effort, and with the consumer continuing to flock to those areas, they're going to continue to get stronger and be a bigger part of our plans.
AW: What percentage of client budgets is actually shifting to digital at this point?
Muszynski: It's not significant, although it's something that all the clients want to talk about. And they're willing to explore it. But right now the offerings that are out there are fairly limited, and there's got to be some proof in the pudding, so to speak. I think if we see the consumer continue to move in that direction, and the offerings are strong in terms of engagement, I think we are going to see more money shift there.
AW: But it's not just the networks. Lots of other players are offering content in the digital world, not the least of which are Google, Yahoo, the social networking sites and TiVo, among others.
Muszynski: I think the next six to nine months will tell a really strong story of where consumers will take this. When I look at all these properties, [I think] it's going to be interesting to see how the consumer reacts to it.
AW: Looking back over the past six months in terms of changes in consumer behavior, what sticks out most in your mind?
Muszynski: Social expression. To me most of this stuff is all about social expression and consumers being able to express themselves and interact with others who are expressing themselves. That to me is a real big push area right now.
AW: Talk about engagement ratings. You broke ground last year by crafting a deal with Court TV that guaranteed that viewers were actually paying attention to shows while tuned to that network. What did you and your clients learn from that deal, and are more vendors working with you in that area as well?
Muszynski: I think we learned we don't know a whole lot about it and we've got a long way to go. The biggest benefit we got was that other sellers recognized the need to do something other than a cpm metric. [Such as NBC's recent agreement to provide Toyota with engagement ratings during the new TV season.] It opened the door to doing things differently. But we're just scratching the surface.
AW: The industry is talking about using commercial ratings to buy and sell ads during the 2007-08 season. Think it will happen?
Muszynski: We're doing it now. Everyone's talking about doing it after next season, but we're doing it now.
AW: On a regular basis for transacting deals?
Muszynski: No, but we are doing it. That's a giant step, for our country. We expect to announce a couple of deals shortly.
AW: But clearly commercial ratings should become the currency for doing deals going forward?
Muszynski: Absolutely. At a minimum.
AW: How are you addressing ad clutter, the increasing amount of ad time networks continue to cram into their schedules?
Muszynski: I'm not going to get the networks to reduce the amount of clutter. What we're trying to do is see if there are ways where we can improve viewer engagement levels through the break. If we can get viewership levels during the breaks to not drop off, then I don't care how much clutter they have. That's one of the reasons you've got to go to commercial ratings.
AW: How helpful is reducing the length of commercial pods in the bid to keep viewers from skipping spots?
Muszynski: Just reducing the length of the pod doesn't do much if, from a contextual standpoint, the message doesn't fit there. The consumer is going to disengage.
AW: How do you improve attention levels?
Muszynski: Branded integrations and content plays are one way to add engagement by having the right environment or having your product part of the storyline or whatever it might be. We're going so far beyond just buying spots on every single piece of business. But it's so different by client. They each look at it a different way.