The upfront has been pronounced a goner so many times it is beyond cliché. But the truth is, the television networks' annual programming presentations are not going anywhere.
As tradition dictates, the staging of TV's big event involves numerous steps, including the requisite commentary that the upfront itself has outlived its purpose, is inherently illogical, and needs to be taken behind a barn and put down. Then, it's on to the shrimp skewers and show clips.
But with the 2015-16 upfront upon us—and amid a host of compelling reasons why the upfront should not continue to command so much attention—a series of conversations with agency executives, TV bosses and media buyers reveals an emerging consensus: The upfront is not, in fact, dead, but is in the midst of the most dramatic shift since the '60s.
Four weeks ago, John Muszynski, chief investment officer at Spark, gathered his 45 video buyers for a strategy session ahead of upfront season. His message was simple: This year will be historic in our industry, and we need to take advantage of it. "This will probably go down as one of the greatest pivot points in our business," he stressed.
Heading into his 35th upfront, Muszynski pinpoints a few trends. "First, the landscape has changed so dramatically, and the consumer has so many choices and is in so much control, but it has never been as true as it is this year," he offers. Perhaps more importantly, the comfort level of buyers to experiment has never been greater. "It's becoming a real option of moving monies to other places," he says.
Then, there is the much-buzzed-about rise of data. "We now have an arsenal of information available so we can make better decisions," Muszynski notes.
Adds Starcom president Amanda Richman: "The world is moving toward addressability and finding the right audience—and the message for that audience. What message resonates, and how do we create unique advertising experiences from those insights?"
The opportunity presented by technology and data to connect specific consumers with precise brand messages—without waste—opens a pathway that includes but is no longer dominated by network TV.
Muszynski suggests that the networks are hip to the shift. "We finally have the television marketplace accepting the fact that money is going to other places," he says, projecting that demand will dip by double digits this year.
Magna Global forecasts another weak performance in the TV upfront as well: 7 percent fewer ad dollars, making for a total of some $20 billion. That's 10 percent less than last year for the broadcast networks and about 5 percent less for cable.
Discovery CEO David Zaslav says volume and the possible migration of dollars to digital will determine the success or failure of the 2015-16 upfront. "The fourth quarter was just a real volume issue for the whole industry," he says. "Volume is better now, but it's by no means robust. With all the focus on what the pricing is, the bigger thing to watch, I think, is the volume. As an industry, we took about 10 percent less in the [2014-15] upfront and we bet on scatter, and we did OK for a couple of quarters. It wasn't pricing. Pricing was actually mid-teens to 20 percent above upfront in scatter."
Zaslav says the question going into this year's upfront bazaar is volume. "Is there going to be another bet on scatter, or is more money going to move?" the exec wonders. "We never really figured out why the money in the fourth quarter, why the volume wasn't there. I say it has to be digital. There is a rise in dollars being spent over there."
That migration suggests what has been forecast by so many industry watchers: a long-term deterioration for network television. Magna anticipates digital catching up with TV by 2019 when each sector will account for 38 percent of global ad revenue. That is forcing networks to rethink their upfront strategies to make way for digital products marketers are shifting to.
Despite the worrisome trend, Muszynski thinks the upfront still has value. "The upfront is still there; it's just serving a different purpose," he says.
The networks have historically offered a tantalizing promise to marketers: You will absolutely hit your target consumer by buying our air. Yes, you will reach additional targets too, but your core demo will be in there. It is the logic that has been written into countless media plans over the decades. But the prospect has become much more complicated for those drawing up media plans, considering ever-shrinking network ratings and an explosion in media choices. And as everyone knows, digital media has its own limitations—principally reliable measurement.
So why is the upfront so resilient? And how do the nets, given the gloomy forecasts, still command so much influence in the marketplace? Because at its core, the upfront has always been about programming. Networks announce schedules, then agencies rush back and debate bids on the schedules, with the pressure of knowing there is scarce content and plenty of demand. And that process hasn't changed so much as it's evolved. Marketers still have a need for premium content, whether it's on CBS, ESPN, Food Network or Netflix.
"You have a lot of brands that still put a lot of money in television," says Digitas chief content officer Scott Donaton. "But clearly, you have a marketplace that has evolved dramatically. Brands are definitely beginning to look at neutral video planning. What is my video strategy as opposed to what is my broadcast strategy, my cable strategy."
The upfront—the most "TV" of events—now figures prominently in the most modern of media-planning challenges: the rise of cross-platform planning. It's a cherry-picking process, no matter where one finds that brand-friendly programming gem. If the TV upfront was designed to support ad execs who could write a media plan on a cocktail napkin in a booth at "21," the emerging upfront design supports overworked, time-crunched buyers and planners who must create those multiplatform media plans, coordinating across a chaotic media landscape and providing real-time analysis of how those plans deliver.
"I'm looking at this as a selling season," says Muszynski. "I'm selling my clients, and they're selling their products."
Viacom ad sales boss Jeff Lucas loves the idea of a selling season. He's got a broad array of products crafted to satisfy the desire of brands to choose wisely in a far more complex and confusing marketplace. It's not just about TV anymore, and Lucas has worked to add data products to back up the buy. "We're selling television, convergently, across multiple platforms. We're trying to sell value," he says.
Viacom has, over the last 18 months, developed a suite of products—digital, social and custom content—and the upfront, far from being merely the place to sell time, is where those products are sold. "The upfront is still the place," Lucas says. "It's the culmination of 365 days of hard work. You're always innovating, you're always selling, you're always bringing new things to market. It's the culmination of all that hard work."
For Lucas, smart television plays well even in a changing upfront market. It still offers something the most disruptive of digital players often cannot: premium video. "Look at all those platforms," the exec says. "They talk about how they can reach, but they lack premium content."
Omnicom Media Group CEO and president of North America investment John Swift agrees: "One of the challenges I've seen, especially in the video space, is that there is a scarcity of premium content."
Everyone has his or her own style. It's been two years since NBCUniversal ad sales president Linda Yaccarino prepared for the 2013-14 upfront by upending the structure of the 30 Rock sales force. "The way we will come to market is really agnostic as to whether it's broadcast, cable or digital, and that's what our customers are telling us they want," she explains. "We have all this stuff, so it's almost limitless how we can creatively stitch together our content. And there's an amplification of the content when the various elements are aligned. They're stronger together."
This year, that evolution fits neatly with the evolved upfront. Instead of a series of broadcast and cable upfront presentations across three weeks, NBCU focuses its 17 individual channels into one week. Presentations are smaller, more focused and designed to answer buyers' questions about data and delivery.
Discovery this year is dumping its usual, over-the-top upfront event at Jazz at Lincoln Center in favor of a dozen direct-to-agency sessions in New York and Chicago, hosted by ad sales boss Joe Abruzzese. Some of those sessions were custom tailored, while others were not. "OMD would be a little different than Zenith," notes Abruzzese.
Ever the salesman, Abruzzese says he loves being able to pitch directly—and to finish the pitch by striking a deal.
"All of a sudden, you start a conversation," he explains, that finds connections between programming and brands, works out specifics, and leads to something that could never have happened at an old-school upfront dog and pony show. Recalling one such agency meeting, Abruzzese says, "I'll tell you, we could've cut a deal right there."
Discovery CEO Zaslav recalls when he was at NBC in the mid-'90s spending months preparing for the upfront—a performance that had to be perfect. "It's been toned down, it's more specific and this year, for us, going directly to the agencies, it feels better," he says. "It feels like we're getting more attention, it feels like we're getting everybody at each of the agencies. We're making it easier for them."
Where the networks once made it easy for agencies by delivering a giant audience—and laying out the schedule at the same time every year at the upfront—today the networks aim to make things easy for agencies by offering to cut through the clutter and deliver premium content on every platform.
"We are at a tipping point where the future of television is going," says OMG's Swift. "We're going to see a big movement in the next 12 months in seeing more viable options for our clients."
But, Swift adds, "content and context matter," and the upfront marketplace then becomes a place for key discussions about who can provide brands with premium content—especially video—that has the kind of ad guarantee always taken for granted in television.
At Viacom's CMT network, the increasingly frenzied world of advertising means making the same surgical trips to key advertisers and agencies in New York, Chicago, Detroit and Los Angeles. "It's a very good use of time," says network president Brian Philips. But the upfront presentation remains critical. "It's our time to take this very specific, strong flavor that is CMT into the heart of Manhattan and reveal it to people who might not be familiar with it on a day-to-day basis," he says.
For Philips, the upfront—a "crazy ritual," he calls it—still works. CMT's tightly produced, 45-minute lunchtime session included stars of the network's new series, a performance by Darius Rucker and country-themed cuisine. Most importantly for Philips, attendance this year was up. "When you get it right, it sparks an instantaneous reaction from advertisers and buyers and press that signals something good is going on at CMT," the exec says.
Starcom's Richman agrees the upfront is, indeed, morphing—what was once exclusively a conversation about broadcast TV's new fall season is becoming a broader discussion about premium content. "How do we make some bigger bets, knowing those bigger bets are in short supply?" she asks.
With all the shifts and distractions and the resistance to dropping billions on an annual plan during a three-month negotiation period, the decades-old upfront, at the end of the day, still draws a crowd because its central function remains. "There is still power in having a point in time where clients are having conversations" with broadcast, cable and digital players talking about unique, high-quality content, Richman points out. "It'll morph, and premium content will be part of the conversation."
With or without the celebrities or bags of swag, the upfront will likely always happen, every spring, like clockwork, Richman reckons—"for getting together, eating shrimp and watching TV."