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The most influential media buyers, the ones who decide how billions of their clients' ad dollars are spent, say they have more options, more information and more ways to make sure investments result in upfront sales this year. The big picture, as far as advertiser demand for broadcast goes, is unclear, according to six top media buyers surveyed by B&C. It's hard to determine because dollars earmarked for video could wind up not only in broadcast but with increasingly high-rated cable shows and digital alternatives whose quality and reach are improving. Buyers and their clients are more and more comfortable matching their video spend to consumer-viewing patterns. None of the buyers seemed overly interested in focusing their buys on C7, the live-plus-seven-days commercial ratings measurement favored by broadcasters because it includes more delayed viewing. Instead, buyers are favoring measurement that tells them who is watching their commercials regardless of whether they're watching in the living room on a flat screen, in the den on a tablet, or out and about on a mobile device. The upfront has resisted change for years. By selling $18 billion in inventory during a few weeks in the spring, the networks put a great deal of pressure on buyers not to miss the market, which often results in premium pricing. Will this year be any different? We'll know soon enough. In the meantime, see what six of the industry's top media buyers are thinking as they prepare for a week's worth of battle—and months of explaining the outcome to their clients.
Andy Donchin
Agency: Carat
Title: Director of media investment
Top Clients: General Motors and Macy's
2011 Buying: $4.6 billion*
Chris Geraci
Agency: Omnicom Media Group
Title: President of national broadcast
Top Clients: Apple, General Electric and PepsiCo
2011 Buying: $11.5 billion*
Todd Gordon
Agency: Mediabrands' MagnaGlobal
Title: Executive VP, U.S. director
Top Clients: Merck, Microsoft and MillerCoors
2011 Buying: $10.2 billion*
Christine Merrifield
Agency: MediaVest
Title: President, video investment and activation
Top Clients: Coca-Cola, Procter & Gamble and Walmart
2011 Buying: $6.3 billion*
*Source: RECMA (all media; 2011 figures are most recent available)
What is the most important unknown factor in the upfront market this year?
Chris Geraci: The level of advertiser demand is always the most important "unknown" going into an upfront marketplace. This year, there is more complexity around that as we see client budgets develop in an increasingly platform-agnostic way. So, while the economic environment will probably support flat-to-modest increases in topline spending, the question remains, how much will the online video alternatives divert from the traditional TV and the upfront marketplace?
Todd Gordon: The biggest unknown factor is how much money will move away from the traditional TV market as part of a holistic video approach. We recommend that clients take a holistic approach to their video purchases, where traditional TV continues to be the core element of the strategy, but reach of light TV viewers is complemented by participation in online video, cinema, place-based video like gas stations and health clubs. We expect clients to utilize these in a big way this year; the question is how much money will shift from traditional TV into these other areas.
Christine Merrifield: At MediaVest, we believe consumer experiences exist beyond a single screen/single device and we will continue to lead the industry in accountability/research of these impressions while working collaboratively with our partners in the marketplace. However, the concept of "monetization without data" as the North Star falls short feels too narrow. The market needs to develop measurement tools that offer transparency with regard to providing content and devising transparency for all brands to plan and amplify appropriately. Following our consumers for the right reasons ... data-led/ROI-focused, drives our thinking and propels us faster into 21st century media. And with that, we need to build measurement tools for 24/7 real-time marketing that has become the status quo for our industry.
John Nitti: Measurement. In an environment where consumption has truly become cross-multiple-screens, we are still struggling with measurement and methodologies to accurately account for total audience. Couple that with the question "Is multitasking/co-second-screen usage a benefit or hindrance?" A benefit that can show engagement metrics and deeper immersion in content, or a hindrance as it is simply a detractor of mind share, further eroding the ability for a marketer's message to break through-as most of the second-screen engagement is not tied to the content or the advertising within it.
Amanda Richman: What's unknown until we're at the table is the degree to which the networks will truly embrace the opportunities that digital and data provide -- from expanded scale to cocreation of content-and develop solutions to drive our clients' businesses forward together. My hope is that we won't be at opposite sides of the table negotiating only on price, when we should be negotiating total value.
Lia Silkworth: In my opinion, it is demand. We have a fairly good sense of supply year over year, but between fluctuating economic factors, client business results and continued digital emergence, demand is still the most important unknown factor. For the multicultural business specifically, given that certain categories and key advertisers are still inactive, or under-spent, demand remains an important variable. We continue to see increases year over year and hope that it isn't a question of if anymore, but when.
John Nitti
Agency: Zenith
Title: President, activation
Top Clients: General Mills, Toyota and Verizon
2011 Buying: $9 billion*
Amanda Richman
Agency: Starcom
Title: President, video investment and activation
Top Clients: Allstate, Kellogg's and Walgreens
2011 Buying: $8.1 billion*
Rino Scanzoni
Agency: GroupM
Title: Chief Investment Officer
Top Clients: American Express, Ford and Unilever
2011 Buying: $19 billion*
Lia Silkworth
Agency: Tapestry
Title: Executive VP, managing director
Top Clients: Allstate, Kraft and Kellogg's
2011 Buying: Not Available
*Source: RECMA (all media; 2011 figures are most recent available)
With broadcast network viewership down and many cable programs winning their time periods, is your thinking changing about the way you allocate clients' dollars and the prices you are willing to pay?
Merrifield: There have never been more relevant/scalable media options in the marketplace than there are today. We expect to continue our journey of consumer experience architecture across all channels social, digital, mobile and linear. Original cable programming has been making a run at prime broadcast for many years, albeit the past few years it has gained in favor with our consumers. It should be no surprise to anyone that one day their persistence would pay off. ... Cable has the momentum, traction and scale that allows for fluid/seamless options for many marketers. However, I never count broadcasters out of the mix. Their reach and social command will continue to attract client budgets, but the question is whether the 2013-14 selling season will be known as the tipping point. Broadcasters fell too deep and reached too high, and where "a few hits do not make a network," they may be met with the same criticism cable programmers received years ago.
Geraci: As an agency, I feel we have been ahead of the curve on understanding the migration of viewership toward cable, and that is reflected in our clients' spending patterns. However, we still spend significantly within broadcast, and I don't see the proportions changing in any dramatic way this year. There have been some great success stories in cable over the past year, and also some meaningful failures.
Gordon: We have a responsibility to seek out value and find our clients' customers across the video landscape. As viewers have moved from broadcast to cable, and from top cable networks to emerging ones, and from traditional TV screens to computers and mobile devices, we follow the customer and reassess value accordingly. And while many cable networks and original shows are thriving, others are struggling. TV remains an amazingly powerful medium, but increasingly we are using more sophisticated data, systems and tools to find our audiences and build reach across the video landscape.
Nitti: The audience shift away from broadcast began years ago, and our strategy has been evolving ever since. We continue to evaluate each program based on our clients' individual objectives, and the way we allocate their dollars reflects that. Our view of the market and how we have organized our staff and investment does require and enable a thorough evaluation of content consumption across all screens/formats to truly understand where ad-supported supply of professionally produced content sits. This has [led], and will continue to lead, to either a reallocation of investment or valuation of cross-channel consumption and delivery.
Richman: Chasing diminishing supply with more dollars is not following the consumer. At Starcom, we will invest where there is audience growth and the opportunity to engage in more meaningful ways, subsequently shifting from channel allocation to a more fluid investment approach.
Silkworth: The dynamics are different when the marketplace is looked at holistically inclusive of all networks, English and Spanish. As opposed to English-language broadcast networks, the largest Spanish-language [broadcast] networks are growing. The Hispanic cable marketplace also has continued to see new entrants year over year as well as consistent growth among several players. Price is still dictated by supply and demand, and the reality is that while growing, the supply in the Hispanic market still outpaces the demand. As the importance of the Hispanic market continues to grow and clients seize this important opportunity, the supply/demand balance may shift.
Is digital creating new opportunities for traditional broadcast and cable networks or is it generating new competition in the video business?
Merrifield: Sight, sound and motion continue to be the path to consumer engagement-innovation, consolidation and newly established business partners are emerging weekly. Our business has never been about "buying" what's on the page, but now more than ever we are architecting deal structures for the future where spot/dots are converted to data/ROI. Digital will create opportunity for those who choose to embrace transparent data as their friend vs. foe. Did you see the Twitter deal SMG made on April 22? This is one of the most significant digital upfront partnerships SMG has ever activated. It reflects the 24/7 marketplace that the industry is moving towards-and it is a deal for the future. This multi-year upfront deal is the first of its kind to recognize where markets are moving to, the first to focus on the value of Twitter plus TV, and in addition it emphasizes the cocreation of new tools and capabilities.
Geraci: It creates opportunity in that TV-based media owners still control the vast majority of high-quality content and now have another distribution platform upon which to monetize it. On the other hand, there are certainly competitive forces out there who would like nothing more than to get their hands on a piece of the TV pie.
Gordon: Mostly, I believe it is creating new opportunities. Much of the high-quality video content being sought out by viewers radiates out of the traditional broadcast and cable TV ecosystem. Consumers love these shows, and they want to watch them on their own terms, which fuels a lot of digital video consumption. And beyond video, digital media and social amplification allows traditional TV to work harder and be more actionable than ever before. The surge in original content production by digital publishers has become an increasing rival to TV in terms of the quality of programming being produced, with Netflix and Hulu being leaders in this area.
Nitti: Yes and yes. ... It is enabling "traditional" video content providers to capture/follow the audience consumption of their content and account for it. While digital-video pure plays grow in scale, they continue to package and channelize their content to be more "TV"-like, in an effort to lure marketers' "traditional" investments further into their space. Both the consumer -- and now, more each day -- marketer are viewing video as video, which I think is a good thing for the overall ecosystem. At the end of the day, the most compelling content will draw the largest and most valuable audience regardless of consumption point.
Richman: To the extent that "digital" represents new sources of video supply, yes, there's competition for networks not only in television, but with their full-episode player offerings. But traditional broadcast and cable networks are evolving; they understand that digital is a growth opportunity, social helps their content get discovered, and mobile devices are making television viewing more engaging at home. The more we focus on the behaviors that are converging versus competing, the more positive opportunities we'll realize for our clients.
Silkworth: As multiscreen engagement and viewership continues to show strong growth for all audiences, and especially multicultural groups, networks must keep a close eye as to how to capitalize on that growth. Increasing video streams across screens should be a primary focus for networks as it expands their ability to capture an ever-growing audience hungry for content on their own time and on their own choice of screen.
How important are integrations and multiplatform campaigns in deciding whether to do business with a particular network?
Geraci: This is all about relevancy, context and execution. We have seen the entire spectrum of performance in this space and know that while these efforts can certainly drive money toward a vendor, it can just as easily drive it away, if commitments aren't met.
Gordon: Every dollar needs to work hard to deliver client business results. Custom sponsorships consistently out-perform commercial-only deals by a significant margin. So these elements are critical to the success of our clients' campaigns because they drive high-level engagement and attention, and they reinforce key brand message elements.
Merrifield: We architect deals in the language that our consumer speak-"Where I want it, when I want it and on any device I want to experience it on." Often, media partners with skin in this game are the ones we find ourselves speaking to.
Nitti: It really depends on the client, but being able to integrate brands into the content of a show organically, expand the association through a network's digital assets, offer content that a brand can merchandise through their owned assets and create a meaningful social dialogue are all important to clients at some level. Being integrated into content storytelling will become increasingly important as the ability to avoid traditional ads continues across all formats.
Richman: Clients' needs are multifaceted; there's a role for networks focusing on efficient reach, as well as robust multiplatform experiences. However, as programmatic buying eventually makes its way to the television space, reach alone won't be enough. Networks that can create content, support our clients' ideas across platforms and leverage their audiences and assets in meaningful ways will be best positioned for the future.
Silkworth: The ability to help ideate and flawlessly execute integration ideas are standard in today's ad world and can impact degrees of investment. The reality is that not every client is looking for integrations, but most of them are and the largest definitely are. Over years, certain network players have become known for creativity and others for flawless executions, but it is critical that all networks ensure consistency on both fronts. It is also worth mentioning that when developing content, networks are no longer the only option; various models have emerged with endless content and distribution models.
With networks pushing C7 measurement and Nielsen's making multiscreen numbers available, how will the measurement issue play out in this upfront?
Geraci: It's really too late at this point to get a significant number of advertisers on board a C7 metric for this upfront, and for a certain number of them, full C7 will never be an option for the entirety of a flight or campaign. Nielsen's online measurement, and an improved multi-platform assessment will certainly play a role in the marketplace going forward long-term, regardless of the agreements made in this year's upfront.
Gordon: This is all about accountability. Every dollar needs to work harder, and every dollar is held accountable to deliver against a campaign objective-to make the register ring. But how can we be truly accountable if we don't have better estimates of the audience viewing our commercials? Our clients are asking for accurate measurement of their creative messages across platform on a more granular basis than ever before. Media owners offering that level of accountability will see their share of budgets increase.
Nitti: Non-C3 metrics make sense for certain advertisers but certainly not the large majority, so where they make sense, we are open to having the conversation. The bigger question is how we are going to be able to accurately measure the contributions to viewership beyond the linear screen and online video. The growth in mobile, over-the-top, tablet and VOD are all eating away at C3 numbers, and until we are able to aggregate them all together, we can't paint the full picture of viewership. Affinity and passion for video content is stronger than ever, but traditional measurement doesn't tell that story. Nielsen and ComScore can capture some of this through OCR [online campaign ratings], XCR [cross-platform campaign ratings] and vCE [validated campaign essentials], respectively, but we are still lacking with respect to mobile, tablet and set-top box VOD...we are committed to pushing as an industry and being a part of an expedient solution.
Richman: Measurement and data have always played a role in the upfronts. But this year in particular it's more acute as big data-in both volume and velocity-becomes as talked about as big hits. Neither C7 nor Nielsen will be the deciding factor concerning where the money flows unless networks make it one. What will be more interesting is where this leads in the years to come as we move beyond average commercial ratings to brand-specific commercial ratings and real-time data. At that point, we'll see the upfront truly evolve to support business goals with more precision.
Merrifield: C7 is a pure artificial inflation of supply and a masking of paying more for less. I see no upside for my clients to jump to a metric in which a few shows see a bump. The next industry measurement innovation is against ROI, and target optimization. I see no benefit to C7 for my clients or the industry; we need to move in collaboration, if monetization of all screens is truly the goal.
Silkworth: It is a hot topic, but in my opinion not something that is as simple a solution as moving from C3 to C7. The marketplace has changed since the move to C3: yes, higher DVR penetration, but also a greater appetite for accountability and measurement outside of just additional days of DVR viewing. It is also important to note that not all networks are impacted by time shifting to the same degree. For example, the largest Spanish-language network, which is often the solid No. 4 broadcast network regardless of language, is almost DVR-proof.
