Strategies Emerge in the Network TV Upfront, But No Movement Yet

While this week began with virtually no movement in the upfront, it is ending with evidence that movement might happen soon, as strategies for both advertisers, the networks, and some alternative advertising platforms are are emerging. Here's a recap of the chatter in the marketplace this week:

In the context of a 41 percent drop in second-quarter earnings, and what it called a "very slow," upfront market, NBC Universal says it will hold back more inventory for the scatter market, which is sold closer to air time. While ratings laggard NBC may be most interested in this strategy, expect others to follow suit, both because it's a bet the economy will improve and it creates false scarcity in the near-term.
NBC is said to be offering declines in the CPM (cost-per-thousand) in the "mid to high single digits," with the other networks offering lower rates in only the one to three percent range, per Advertising Age. That story also says that CBS, which in May was predicting it would get CPM increases, is holding out hardest, but from all of the research I've done over the last few weeks, it looks highly unlikely that it would not have to settle for a CPM decline.
The ever-aggressive Cabletelevision Advertising Bureau sent a letter out to agencies this week urging them, and their advertisers, to come into the open arms of cable first, with the network market, which usually goes first, at a stalemate. The CAB has told advertisers (with astoundingly faulty punctuation), "The stalemate can end tomorrow, call on your Cable networks to get the price/value your advertisers need from this upfront. "If advertiser's want to end this stalemate, they can buy Cable first, shift another 15% of their budgets into Cable and realize the kind of price/value they need in this year's Upfront marketplace"
According to Alan Cohen, U.S. CEO with Omnicom Group media buying group OMD, the stalemate in the upfront marketplace is making agencies look harder at alternatives to buying broadcast TV: "The main thing we are doing is being proactive and talking to clients about alternatives to drive efficiencies. This situation has made us look at some alternatives that will give clients the ability to reach broad audiences in a different way."

Rounding up those headlines shows just how peculiar this upfront is. As a rather big skeptic of the upfront marketplace, and the broadcast networks continuing ability to be the go-to place for advertisers even as their ratings decline, it looks to me as though the chickens are coming home to roost, as they arguably should have years ago. Not that I'm expecting the chickens to move that fast. While on the one hand, I can certainly understand the networks' need to hold out for as long as possible to get something close to the pricing they wish for, on the other hand, there's an obvious narrative thread presented above -- that the longer the nets wait to firm up pricing, the more time advertisers have to seek out alternatives, and it looks like they are finally starting to take those alternatives seriously.

Previous coverage of the upfront at BNET Media:

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