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The Upfront and the Unknown

As the head of MindShare North America, CEO Marc Goldstein guided a mind-boggling $10.2 billion in billings on Madison Avenue last year, according to RECMA, the organization that keeps tabs. So when he speaks, networks and competitors listen up.

Goldstein, who in his career also served as a top executive for General Motors’ Mediaworks, talked about the changing TV landscape and the upcoming upfronts with B&C’s John Higgins.

Among many issues surrounding the upfronts is the disruption caused by the digital video recorder [DVR]. The last piece of research I got from the networks claims that the recall on commercials in programming seen on DVRs is no different than watching live TV. I just didn’t believe it.

Yeah. I can’t believe that either. What level of recall are we talking about—product or messaging? Are we talking about “I remember fast-forwarding through the Pontiac spot” or “The 30-second Pontiac commercial was intended to introduce the new brand, show that it has two doors and a 250-horsepower engine and gets 35 miles to the gallon.”

Now you didn’t get any of that. All you may have gotten was the fact that “Oh yeah, there was a Pontiac commercial that I fast-forwarded.” That’s one of the arguments why you don’t count DVR ratings—because 70%-80% of the commercials are fast-forwarded. You’ve fundamentally lost the value of the spot.

How do you cope with the disruption? Not paying for the disruption solves only half the problem, right? You want your commercials seen.

That’s why we try very hard to look at all of these alternative media. And while the 30-second spot is not going away and there are still lots of people watching a program live, you have to look at other ways to reach the consumer, whether it’s video-on-demand [VOD], this experiment that ABC is trying where you can’t fast-forward through a commercial, or the Internet.

Then there’s the whole question of how Nielsen has created several ways to measure DVR viewership as opposed to the old standard day-and-date ratings. How’s that going to play out?

Quietly behind the scenes, there are a multitude of conversations taking place, all with the intent of reaching conclusions right before we ever get to upfront. In many cases, that’s going to happen. We have officially taken the position that the number that we would use as a benchmark is [Nielsen’s “live” ratings category] only.

Past that controversy, where do you see this year’s upfront market? What does that say about the broader market?

Basically, broadcast prime time upfront spending is going to be flat to down. But that doesn’t mean total TV-ad spending will be down. That’s an important distinction.

The networks are petrified about presenting to the financial community a number in upfront that is lower than last year. But that’s not necessarily a function of there being less spending, just less being committed upfront.

It has nothing to do with money shifting to cable. What I think is going to happen is, more advertisers are going to hold money back for “content opportunities,” because we don’t know what the first-quarter schedule and new programs will look like, nor the second, nor given original programming all year long.

We all believe that developing content relationships with programs makes a great deal of marketing sense. And if I’ve spent all my money up front, I have reduced my flexibility to go in and buy Deal or No Deal, for example, which didn’t premiere until [last December]. There is a greater recognition that, for me to take advantage and participate in all of these new things that I know nothing about, I need to have greater spending flexibility.

The Web and multiplatform plays are clearly real rivals to TV. But you don’t think they’re going to take away from prime time broadcast this year?

We probably all have somewhat different points of view about that one. Some of that may get funded out of cable before it gets funded out of network television.


A lot of us are spending a ton of money in cable. And a ton of money these days translates to an enormous number of units and rating points. So for a little bit of money, you can pull it out of cable, and it doesn’t have a big impact on your overall audience delivery.

Last year, cable slowed down in terms of growth. Growth was a lot less than a lot of people thought it would be. And this year I don’t think we’re going to see a huge growth in cable.

Because of the Web and why else?

Alternative media, Web included, VOD, broadband—we’re all experimenting. And we’re all recommending to clients to experiment and to allocate resources to some of these platforms that we need to learn about and better understand what they do to our communication.

What’s your sense of the effectiveness of some of the alternative media that are most video-related? Everybody’s playing with it right now.

That’s what we’re trying to learn about. That’s why we’re experimenting, if you will. That’s why we’re recommending the clients to be in it. We need to find out, and we don’t have answers at this stage of the game.

What’s the advantage of being a pioneer to help develop that when you may or may not be getting what you need for a particular campaign or a particular brand?

Well, you can do some original research, you can do some testing. Without getting specific, you can put a direct-response advertisement as part of plan and determine what kind of response there is and what the triggers are.