The upfront, a virtually unchanged institution for years, seems to be evolving in the face of digital technology and new demands from advertisers.
On the eve of the broadcaster’s week of big programming presentations, B&C business editor Jon Lafayette spoke with Marianne Gambelli, a longtime participant in the up-fronts from both sides.
She began as a buyer, had a long, distinguished career as a top sales exec at NBC during its decade of dominance, and now is chief investment officer for Horizon Media, the largest independent media agency.
The discussion began with a question asking Gambelli if she remembered her first upfront.
“I was at Grey Advertising and the upfront was incredibly important. There were a lot of all-nighters and the pressure was intense. ABC confirmed we could pick up our daytime plans at 6 a.m. In those days, everything was paper-based so we had to physically retrieve the plans from the network in the morning when they were ready,” she says. “I remember sitting at ABC, waiting for the plans and observing what was happening around me. Everyone wanted to go to the CBS studio party on 57th Street. It was an exclusive event with an all-star lineup, so it was a big deal when you finally got invited,” she says. “In those days, NBC did a breakfast at the Waldorf-Astoria, but none of the events were as big and orchestrated as they are today.”
When Gambelli moved to NBC, the competition was ratcheting up with cable. The big broadcasters had to do more to compete for the attention of buyers.
“People were getting frustrated that they had to sit through these boring, two-hour-long presentations—so all of a sudden it became, ‘OK! We’re in the entertainment business; we need to entertain.’ The events became more expensive, and more people wanted to attend.”
“The Grey buying group that I worked in was approximately 20 people, which was considered a lot then. Today, most of these buying groups are 80 to 100 people. As more and more people wanted to participate in these events, the venues got bigger and grander and the intimacy fell away,” Gambelli says. She notes that now it seems some cable outfits, like Discovery, are reverting back to the old days, trying to create more intimate upfront discussions with smaller groups of buyers and clients.
A big change in the upfront routine came in 2008, when the TV writers went on strike and networks had no new programming to present to advertisers. “I think that was a wake-up call,” says Gambelli. By then, broadcast ratings were already eroding and cable was benefiting. Buyers were complaining that they were paying higher prices for fewer viewers—and that led to a new level of frustration with the upfront process. Former Carat CEO David Verklin became the leader of the anti-upfront movement, so to speak, arguing for changes in the way business was being conducted, down to the cold pizza consumed during late-night negotiations.
“There was so much anger focused around the upfront. People didn’t like the way business was conducted, they didn’t like the overnight hours, and there were so many pieces of the process that needed to change,” she says.
Volume was down in last year’s upfront. Some say it’s because clients are more interested in waiting until the last moment before committing to spending their ad dollars.
Today, clients have more opportunity to adjust upfront buys. “The more big data comes into play in making buying decisions, the more agencies and clients alike are going to be waiting for first-party data or sales data to come in before making a decision,” Gambelli says.
But while clients want flexibility, most are still willing to make significant early commitments.
“If the TV upfront is dead, why is digital doing NewFronts?” Gambelli asks. The answer is because that’s when big advertisers are deciding when to spend the bulk of their money. “They’re all coming in and saying, ‘This is the time to negotiate.’I actually think it’s smart because it allows the client or buyer to look across the entire landscape at one time.”
Now that Gambelli’s on the agency side, she sees things the networks should be doing differently.
“I think the networks are getting there, but this whole move to automation, to data, to looking at their audiences from a more digital perspective makes sense,” she says. “They think they understand the video and digital landscapes, but I’m not entirely convinced that they understand the implications and the impact that those areas will have on the future of the upfront. Networks need to realize how quickly the landscape is moving and how clients are becoming less connected with content and more connected to ROI data.”
Buyers also need to know more than networks tend to want to say at an upfront, she adds.
“I think they’re going to have to show value—whether that’s through pricing, through added value, through audience targeting, or whether it’s through more flexibility—they’re going to have to figure out a way to make themselves more attractive to buyers. All of those pieces are all the same sort of analytics that you would look at in any market. I think this year is going to be a little tougher because there’s going to be a lot more ability—and by that I mean advertisers want more flexibility and there are going to be a lot of sellers that aren’t going to hit their budget and will be looking to drive volume.”
Gambelli has been in the middle of a lot of conversations about industry standards on C3 vs. C7 when it comes to measurement.
“The currency you transact on vs. the currency you plan and buy on are truly two different things,” Gambelli says. “We never really just rely on a demo rating; we have our own optimizer filters and characteristics that we add onto the demo, and we watch those in accordance with how they deliver [vs. a guaranteed number]. Everybody has multiple demos that are much more targeted and refined than what actually gets transacted on.”
Another major new frontier is targeting consumer behavior, not just demographics—enabling, for example, ad transactions around viewers who have bought a car and need auto insurance.
“I think that automation, data, and technology will get you there,” Gambelli predicts. “I don’t think we’re anywhere near that right now—but I do think as we start to use first-party data in terms of driving these buying decisions, then we can ultimately get there.” For now, networks and agencies are doing experiments that move in that direction.
For all the change, Gambelli believes there will be an upfront in five years, but maybe not 10.
“This business moves pretty slowly. I do think we moved rapidly this year in terms of thinking differently about TV and building out some new platforms. I think there’s going to be a slow crawl going forward, but in three or four years’ time when we have a benchmark and we have the analytics and we can prove that these segmentations are scalable, reliable, and effective, I think it’ll blow up. Once you have automation, you won’t need to do it a year in advance; you can buy much closer to airdate. Additionally, inventory management will become an entirely different process because it will be easier to execute on a shorter time line.” As for this year, Gambelli sees the market favoring the buyers.
“How much, I don’t really know, because we’ve seen some erosion. But clearly the TV scatter was pretty modest. And there are some players out there that are pretty aggressive for cash,” she says.
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