NEW YORK The broadcast television upfront will continue to be the primary way advertisers buy the medium, but look for more TV deals to be done on a year-round basis, involving innovative ways for advertisers to get viewers to interact with their products, media buyers and client executives said at an International Radio and Television Society meeting this week.
"The upfront is not going to die," said Bill Cella, chairman and CEO of Magna Global Worldwide. "The upfront is still important, but we are transitioning to a 52-week marketplace."
John Muszynski, CEO of Starcom USA, said the traditional upfront buying period is no longer seen as a place where all an advertiser's dollars have to be placed on 30-second commercials. "We have to look for solutions for our clients business problems beyond that," he said.
Anita Newton, vp of marketing for major TV advertiser Sprint, said more advertisers would try to lock up deals before the upfront each year in an attempt to find ways to get their messages into what she called "prime real estate." Those might not necessarily be the highest rated shows, she said, but programs that make sense for a particular advertiser. That may also include more nontraditional ways of advertising like sponsorships of streaming videos of programming.
"Our customers want to watch [shows] everywhere, regardless of what type of screen," Newton said. "A media on demand mind-set."
The message to the TV networks was the more places their programming are offered, the more places the advertiser will have to choose from to deliver messages.
Cathy Crawford, president of local broadcast at MindShare, theorized that as more networks begin offering their shows via video on demand, creating more advertising options, the more likely that the length of 30-second commercial pods on TV will begin to shrink. She described it as "shifting the commercial load off television and onto video."
While the TV networks are finding alternative ways to distribute their programming, Crawford said radio is "at a very interesting crossroads."
"The younger demo has fallen madly in love with the digital world and walk around with iPods and MP3 players in their hands [rather than listening to the radio]," she said. "The younger the demo, the more likely they are to not be introduced into radio. Radio has not died, nor will it, but it will have to change."
Crawford added that she is not sure whether high-definition radio is the solution to draw in younger listeners.
While all of the IRTS panelists who spoke here on Tuesday see the Internet and other new media as a growing segment of the advertising pie, none believe it will overtake television or other traditional media in the near future. Cella said most large advertisers are spending only about 2 percent of their ad budgets in online advertising, while the percentage is a bit higher for clients with smaller budgets—between 5-8 percent.
Crawford sees those percentages at between 5-10 percent. Steve Grubbs, CEO of PHD USA, said the percentages could vary widely depending on the advertiser category. He said some retail, auto, financial services and entertainment category advertisers could spend as much as 10-15 percent of their budgets, while other advertisers in other categories may spend less.
Newton said Sprint spends about 10 percent of its ad budget online and another 5 percent on "new media," which she said includes VOD, mobile and any other nontraditional platforms. She said online spending becomes particularly attractive to her when it can interact across other traditional media platforms.
"In this environment, you can't ever guestimate what percentage [to spend on the Internet] is right," Muszynski said. "It depends on the client and their individual needs. There is no typical client."