In Focus: TV’s upront chemistry

Networks' ad strategy: a bevy of blurb options

The red carpet was 60 feet long outside a large studio space in Gotham’s SoHo district, and it was packed with “Bravo-lebuties.” As advertising honchos and media buyers stepped inside for the cabler’s March 10 upfront presentation, they were immersed in the “Bravo experience.”

Within the space, arranged like a house, a kitchen full of “Top Chef” personalities showed off their culinary wonders, the “Shear Genius” team offered hair and makeup touch-ups, Bravo-affiliated design mavens had decked out a living room, and attendees could have their pics taken with the “Real Housewives,” courtesy of green-screen technology.

The message to Madison Avenue was clear: Bravo is not merely a cable network; it’s a way of life.

The unconventional approach to TV’s upfront season, which kicked off this month and culminates with the broadcast network presentations the week of May 17, is just one reflection of the biz’s zeal to establish ever more extensive relationships with big-ticket advertisers.

Net execs are bullish that advertisers will be in a mood to take some big swings after retrenching last year amid the financial meltdown. And with branded integration a bigger component of marketing campaigns and network profits, the major broadcast and cable nets are positioning themselves as one-stop shops for TV and online blurbs, new forms of integration and even e-commerce partnerships.

We still sell TV impressions, but more and more they involve marketing programs tied to creative content delivered across multiple platforms,” says Jon Nesvig, prexy of sales for Fox Broadcasting.

The cross-platform push has transformed the upfront selling season, the period when nets book the bulk of their ad commitments for the coming TV season. What was once a burst of wheeling and dealing after the mid-May sked unveilings, for as much as $20 billion in ad buys, has evolved into a lengthy courtship among buyers and sellers to set deals that require long lead time for execution.

There’s an extra energy to the buyer-seller mating process this year, because marketers have money to spend. That’s in sharp contrast with last year, when the global tremors of the first few months led to marketing budgets being slashed or hoarded and product introductions delayed. The networks took a hit in ad rates and in the overall dollars committed to the upfront process. Broadcasters ABC, CBS, Fox, NBC and CW collectively brought in a little more than $8 billion, or a roughly 10% drop from about $9.2 billion in 2008, while the basic cable side reeled in about $7.7 billion, down slightly from its 2008 tally of nearly $8 billion.

But as the economic picture has slowly brightened over the past few months, the nets have been lapping up big price increases in the scatter market, where spots are sold on a short-term basis. The laws of business gravity ensure that incredibly high prices in the scatter market will drive advertiser demand for upfront deals, where pricing is determined months in advance rather than fluctuating significantly depending on the short-term demand for TV time.

I’ve never seen a scatter market as strong as it is right now,” CBS Corp. CEO Leslie Moonves told Wall Streeters at the March 9 Credit Suisse investor confab in New York. “Our sales guys are coming to us asking for more inventory. So we’re literally taking some promo time” to sell, he said.

There’s an increasing emphasis on dealmaking that combines TV, online and even mobile blurbs, because viewers are increasingly watching TV programs online. Ardent fans are drawn to online extras such as behind-the-scenes clips, podcasts and chatter about shows on blogs and social networks.

This will certainly be a more bullish market on multiplatform deals than ever before. Where consumers go, advertisers go,” says Brad Adgate, head of research for media buying firm Horizon Media. “The networks are going to do everything they can to be a player in that arena.”

After the hit in 2009, nets execs are champing at the bit to regain some ground.

There’s a strong competitive dynamic in the tech sector, with Apple spending big to tubthump its iPad while rivals look to intro similar tablet-style computing devices and e-readers. And even the restaurant category is heating up as casual dining chains a la Applebee’s and Chili’s seek to lure diners back from the lower-cost fast-food giants that have prospered in hard times.

But when it comes to TV, nothing drives ad dollars like autos.

Amid a slow rebound for automakers, General Motors, Chrysler and Toyota all have a pressing need to get a positive message out to consumers. Hyundai has been aggressive in marketing its lower-cost options even through the worst of the meltdown, while Honda and Ford are likely to spend significantly to maintain their recent sales momentum and intro high-profile new models.

There’s a real competitive urgency in the (automotive) category,” Nesvig assures, with obvious glee.

Digital sales remain a small percentage of the Big Four’s overall advertising revenue base — those old-fashioned 30-second spots still pay most of the rent — but it is as important a marketing tool for network branding as it is for selling soap or cars or cell phones.

It’s trying to build that deeper connection with the consumer when they think of a cable network or broadcast network,” says Jason Maltby, a top media buyer for Mindshare, which reps such blue-chip clients as IBM, Ford, American Express and Heineken. “From a consumption standpoint, it’s important to get (viewers) to not only watch the show but go online, participate in conversations and talk with their friends about it. It’s creating the modern water cooler in a digitized fashion.”

The biggest hurdle for traditional nets in converging the TV screen with computer and mobile screens, however, is finding a more sophisticated ratings yardstick.

Nielsen is just starting to roll out a service that tracks both TV viewing and Internet vid viewing of Nielsen homes (the company’s TV and Internet rating samples had previously been distinct groups). But the service has its limitations, for a host of technical reasons, and it will be a long time before a cume rating for TV and Internet viewership of a particular show will be used as the currency for advertising deals. But the introduction of any research that tracks the two-way street of TV and Internet viewing will help the biz eventually grow more comfortable with the use of cume ratings, biz vets say.

If we can get a common measurement system, we’ll get value for advertising impressions wherever they’re delivered,” says Fox’s Nesvig.

David Levy, prexy of sales, distribution and sports for Turner Broadcasting System, says the strongest selling point to advertisers is that TV watching in the typical American home has increased in recent years even amid the huge spike in video viewing via the Internet. (According to Nielsen’s most recent benchmarks from December, the average person watches about 140 hours of TV per month, including more than seven hours via DVR and another 3.5 hours via the Internet.)

Turner’s pitch to advertisers is that the company is becoming increasingly focused on blending TV, Internet and mobile platforms with its programming. As TNT and TBS invest many millions in original programming, the goal is to make the shows — and sponsorship opportunities — ubiquitous wherever consumers look for entertainment.

People are definitely consuming more content on different screens, but it hasn’t affected the amount of time people spend on TV,” Levy says. “If you like the show on one screen, you might watch it on another.”

Turner is also increasingly focused on selling what’s known as “contextual” advertising, or having spots run adjacent to relevant subject matter in programming. For example, in a telecast of the 2005 Will Smith starrer “Hitch,” the first blurb to air after a scene involving dating is a spot for eHarmony.com. Or a scene with a car crash in “The Bourne Identity” transitions into a spot for the OnStar auto security system.

For sure, the bread and butter of television remains on-air time, and that’s why there’s such a premium put on integration deals that bring in top dollar. The latest poster child for this kind of long-term relationship is the integration of Toyota automobiles as the car of choice for ABC’s frosh hit “Modern Family.”

Ad buyers, however, warn that there is a danger of overdoing it as nets zealously open up their program time to product plugs.

Consumers are not stupid,” Maltby says. “There is a point which we can assume they’ll push back and say, ‘Geez, it felt like I just watched 48 minutes of a commercial.’?”

Bravo, of course, has made an art of weaving brands and products into the fabric of its lifestyle-centric programming.

Susan Malfa, senior veep of advertising sales for NBC Universal’s Bravo, Oxygen Media and the Women@NBCU marketing initiative, says she’s noticed a “heightened” interest among advertisers in cutting deals with broad scope and innovative approaches, especially involving social media. Bravo’s focus on appealing to the lifestyle interests (and spending habits) of its young, well-educated urban aud is so complete as to include dining, nightlife and shopping guides for New York, Los Angeles, Chicago and 30 other hotspots stretching from Paris to Shanghai to St. Barths.

The tone of the conversations we’re having right now is very much about ideas,” Malfa says. “Last year when everyone was in crisis mode, there was a lot of hesitation. … Now we’re getting asked to help come up with marketing solutions to their needs that can be communicated through our programming.”

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