Michael Bologna, Group M’s emerging communications director, is one frustrated dude when the subject is upfront TV activity. At last week’s VideoNuze Online Video Advertising Summit here in New York, Bologna became the latest in a parade of people with something to say in public this year. Subject of this public discourse: the annual ritual of giving TV networks more sponsor dollars in advance of next season than the year before, regardless of their ratings or program quality.
“TV is the only scam around,” Bologna declared in front of VideoNuze’s attendees. “Ratings go down, prices go up.”
With the exception of the financial crisis a few years ago, advertisers and their agencies appeared to lock into TV network upfront rate hikes season after season, rewarding a channel’s performance no matter how wonderful or awful it was. Nobody in the ad or TV world spoke a discouraging word about the hikes, and when journalists or commentators raised the subject in public on occasion, nobody in the ad or TV world offered a rationale behind the automatic increases. Stark contrast to the stock market, where a company’s stock price or falls on how well or badly the company’s performance goes.
A Sea Change for the TV Landscape
Not so this spring. People in both worlds are igniting a long-overdue public hearing on upfront price decisions. First we had Mal Benning, A&E’s ad sales chief, labeling the idea of rewarding under or badly-performing channels a “failure tax” during his venture’s big-top event early May at Lincoln Center. Then came his counterparts at Univision and Telemundo two weeks later with “why pay more for less” pitches at their respective mid-May ceremonies. Now comes Bologna making his “scam” case.
You can question what provokes individuals like Benning or Bologna behind their statements. What you can’t question is that this issue has exploded in the open, and maybe, just maybe, the ad community is willing to stop playing upfront biz as usual. Stop when the competition for TV audiences will get tighter this coming season as more networks develop more original programming than ever before, more networks will enter the scripted TV arena, and smart TVs give viewers a new way to watch the Internet–not just Internet-streamed videos–plus original interactive applications. More Web destinations as Netflix and Vevo acknowledge that people are catching their work on the TV set, instead of the PC.
Is the ad world ready to tell network X, Y or Z: “Your ratings and shows don’t cut it. You get less money upfront, not more. We’ll reverse our attitude when you reverse your performance.” If Bologna had his way, you bet.
“It’s still the advertisers’ money,” he answered when I asked the question at VideoNuze. “You have to be respectful to their budgets and their wishes. Part of the problem is culture, and part is advertisers still contented with the status quo.”
However, almost a month after the end of upfront event season, it appears if advertisers and agencies are not willing to demand cutbacks, they’re not willing to increase. Going into this week, The CW wrapped its upfront sales with the same dollar result as last spring (about $400 million) and CBS, the top-ranked broadcast network, may end up the same way.
There’s a lot more upfront biz to get through. Unlike last year or previous years, however, an automatic hike for all is not in the cards–and that’s progress.