4A’s Buzz: Another Lengthy Upfront in the Works

Last year’s upfront marketplace was a complicated one, with issues such as whether to include DVR viewing in television ratings and how to handle the sale of digital properties on the table, and this year is looking like it may be even more complex.

But while at last week’s American Association of Advertising Agencies’ annual media conference both buyers and sellers made it clear they were aware that there are several difficult issues to confront, at least both sides were talking to each other this year, Donna Speciale, president of investment and activation at MediaVest, told MediaPost. “Last year at this point, there was no conversation,” she is quoted as saying.

The biggest issue at hand is the currency that will be used in negotiations. Nielsen’s commercial ratings data will not be released to the industry at large until late May, though some agencies are using Nielsen’s proprietary software that allows them to put together their own commercial ratings data. If those agencies use commercial ratings while others use program ratings, it could slow down the buy/sell process.

On the other hand, if program ratings are to be the basis upon which deals are negotiated, then the media agencies say they will once again insist upon live-only ratings. The broadcast networks, who bowed to the wishes of agencies last year, have said that this year they will only do business using live-plus-same-day ratings.

Another kink in the process may arise because some networks, such as NBC, plan to offer media agencies guarantees based on viewer engagement. NBC Universal president of research Alan Wurtzel has said that his network, in conjunction with IAG Research, will offer advertisers such guarantees, based on a test with Toyota during the current TV season.

Digital sales, like last year, can also muddy the waters. Digital buyers have said that they expect to play a bigger role in this year’s TV upfront, though they downplayed its importance in the wider scheme of online media spending. “Traditional media companies remain secondary participants in online advertising,” Jeff Lanctot, vp/general manager for AvenueA/Razorfish is quoted as saying. He estimated that last year, his agency spent nearly $550 million on digital media; less than 10 percent of that went to digital offshoots of traditional media.
According to Lanctot, it is the networks that are fueling the digital upfront hype, so they can show that they are embracing new media. “I understand why they are doing it,” he said, “but the networks’ digital offerings are a little sliver of the digital world.”