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Published: May 13, 2008 at 09:27 AM GMT
Last Updated: June 9, 2008 at 09:27 AM GMT
Originally published: May 13, 2008
In past years, JackMyers Media Business Report has issued specific projections for Upfront spending. Both my forecasts and my post-Upfront analyses have provided insights on market conditions and network-by-network revenue, cost-per-thousand and sell-out performance. My own performance has generally been on-the-money, although last year I believed the market would be considerably softer than it, in fact, turned out to be. (At least this was according to published reports, although annual corporate revenue reports were more in line with my original expectations.).
This year, I am not offering predictions nor will I report after-the-fact on network Upfront revenues. The Upfront is no longer a representative indicator of network performance and the information released by the networks is, at best, questionable. If a network ever actually reports poor performance in the Upfront, then we can be assured it was a disaster.
Most industry leaders appear convinced the Upfront will closely follow last-year's pattern without the delays caused by the conversion to C-3 (live plus 3-day delayed commercial viewing) ratings. This suggests a reasonably quick process that should be completed ahead of the July 4 holiday. The earlier Memorial Day weekend will also contribute to a speedier Upfront process. While agency executives are less than eager to accept another round of CPM increases, the fact is demand should be strong and networks are increasing value through multiple marketing and cross-platform initiatives. While broadcast networks' CPM increases will not fully compensate them for erosion suffered during and after the writers' strike, they should have healthy gains as well as incremental revenues from alternative distribution models.
Because the higher-demand networks can re-allocate their inventory, reducing the share of lower paying categories and increasing the share of revenues from higher paying advertisers, overall per-network CPMs can increase while individual advertisers and agencies can hold the line with minimal real CPM increases. Automotive and pharmaceutical, which are negatively impacted by current market conditions, are traditionally lower-CPM advertisers, and declines in overall category spending will be replaced by higher paying categories. "Advertisers who are constantly looking for efficiencies are the ones who fall out of the medium for cost reasons," explained a senior industry executive. "Through attrition, networks are losing the lower cost advertisers and increasing sales to higher value advertisers. The base of TV advertisers is still growing, so the medium is healthy."
It appears that once again the stronger networks will get stronger and the weaker networks will also do just fine. But media companies that are slow to invest in value-based media and marketing extensions will find themselves forced into a media commodity pool designed to drive costs toward free.
Inevitably, the next generation of Upfront buying and selling relationships will incorporate network review of advertisers' creative strategies and an analysis of which advertising messages are most complementary to each network's program content, and which are most effective in holding audiences through commercial breaks.
A surprising fact. Music Content and Lyrics are the number 1 searched category on the web, according to Google since 2004. More people check out lyrics then search for sex, news, sports etc.
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