The Hated Upfront Buying Season... It Still Works - Steve Grubbs - MediaBizBloggers

It's that time of year the industry loves to hate… the Upfront TV Buying season. For years the industry pundits and the sixty-second media experts have been bashing this annual TV buying ritual. It has been labeled "backward" and "antiquated" by the new media impresarios. It was proclaimed "dead" by the trade press… several years ago. The media buyers are dismissively described by the Upfront naysayers as lemmings-to-the-sea or lambs led to the slaughter. And every couple of years some proud, if naïve, marketer jumps on a soap box and proclaims with Howard Beale-like passion, "I'm mad as hell and not going to take it anymore." Yet, here we go again.

On the surface, the Upfront TV buying ritual is oh-so-easy to criticize. The uninitiated observer might say, "So you're telling me there are hundreds of millions of dollars, 80% of annual TV spending, negotiated between media buyers and sellers until the wee hours of the morning over a 3-4 week time period? They are committing to spend dollars up to 15 months in advance of airdate in many programs that will likely be canceled? And all this occurs in an environment where there is little cost transparency? So, what does everyone do for the rest of the year?" OK, the upfront buying process does sound a little nonsensical.

Yet, for all the criticism, no one has suggested a viable alternative, and that's why the Upfront, for all its warts, still works. So long as it is more cost effective to buy upfront vs. scatter, the model still works. So long as TV continues to provide value to advertisers, the model still works. So long as the best shows are available on the dates you need them, at the lowest rates, with audience guarantees, options to reduce commitments, digital extensions, branded entertainment opportunities and all the bells and whistles, the Upfront is the most effective system by which buyers and sellers can transact business. The minute all these Upfront buying benefits are available through an alternative buying strategy or system, then it's time to re-evaluate the efficacy of the system.

In truth there are other models that could replace the current Upfront buying process. We could move to rate card pricing or an ad auction model. If all media sellers published a rate card and sold inventory based on that rate card, there would be more cost transparency in our eco-system. The media seller could also apply different discounts to packages of advertiser inventory based on volume and mix. Of course, they could also eliminate CPM guarantees. This model could work, but the transition would be tricky. If I'm one of those large CPG advertisers with below market legacy rate bases, my media costs could increase significantly in the transition. An ad auction model would offer many of these same benefits, but it would be more complex to implement. And again, the advertisers with low legacy rate bases could suffer substantial inflation in the transition.

Another option is for marketers or agencies to just place their media buys on a short term, or scatter, basis. The truly savvy market forecasters could effectively execute this strategy when the market is "soft". While this may be an effective strategy in some situations, the risks frequently outweigh the rewards, and sometimes the penalties can be severe. Also, given the across-the-board reductions in media buying personnel precipitated by the cut-backs in client compensation, no one has the manpower to implement an all Scatter buy strategy.

I've observed the Upfront buying ritual for 30+ years. It's an imperfect, but effective system. As a nation, I think we've learned not to tear something down before we know what to put in its place. To the Upfront naysayers and critics, I ask, "What's your alternative?"… and that would likely be a conversation stopper.

Steve Grubbs is President and founder of Second Act Media consultancy. Second Act Media is an advisor to companies working in the media, marketing, entertainment and sports industries. Steve can be reached at steve.grubbs@secondactmedia.com.

Read all Steve’s MediaBizBloggers commentaries at My Second Act - MediaBizBloggers.

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