The World: New solutions could bring honesty to upfronts

The annual US upfronts must now address issues of audience enjoyment rather than mere figures, John Muszynski argues.

In the US, we have an annual media ritual that harks back to the days of black-and-white television.

It's called the "upfronts". It's that time of year where agencies and clients assess objectives and budgets, and determine how dollars can be used to transform brand ambitions into realities.

Once armed with all the proper knowledge, US agencies meet with television channels for a massive, yet intricate, series of negotiations, during which a large proportion of annual marketing budgets are committed.

The deals are often sealed with a handshake. These exchanges happen in an absurdly cramped period of time, but out of these exchanges come media plans that are implemented across the entire year, despite having been planned "upfront" of when they actually air.

The negotiations are exciting, not just because they're frenetic and tense, but also because of the business opportunity they provide. TV channels - predominantly national networks and cable - share with agencies their programming line-ups, their scheduling plans, their cross-platform advertising opportunities, their brand integration capabilities and more. All the major players in the market are present, attending star-studded networking parties and discussing the business of television.

Two major issues that have arisen in recent discussions are personal video recorders and the network/cable power struggle. Both of these issues emanate from the fact that technology has created new viewing habits.

But the debates will only be resolved when marketers discover how to design plans that account for skipping ads or programme viewing choices.

Beyond those concerns, the US upfront market faces many criticisms, mostly regarding the quirks of the negotiation proceedings. But this year, there are additional concerns: fears that audience quality and volume are dropping while upfront ad rates continue to rise; an emergence of return-on-objective (ROO) strategies versus the old return-on-investment approach; the increasing broadband video investments; the renewed proposal of a commoditised negotiation model, and the levels of consumer engagement offered by media partners.

In strict terms, "upfront" refers to how the negotiations precede the ad placements, but the irony is no one is very "upfront" about the point of the process. While the process is that pinnacle of savvy negotiation and financial efficiency, we've lost sight of the fact that these things are the means to an end and not the end in themselves.

The ideal end? Viewer engagement, as opposed to the traditional goal of optimised exposure. Media must be more upfront about their capacity to deliver advertising opportunities that engage consumers. Marketers must be upfront about the fact they need to engage the consumer - and the dollars they supply to any medium will be contingent on the fulfilment of that demand.

Demand is a word that is in danger of losing its meaning in this sector. In a healthy market, ad inventory is so important to brands that demand for the space rises and so does the price. In a weak market, prices are raised regardless of marketer objectives because of greater revenue demands from corporate media owners.

The fact is, we all face corporate pressure during negotiations. However, we cannot let these pressures determine pricing. If the economic principles of supply and demand are the fair practice in up years, they must also be considered fair in stagnant years.

And ultimately, of course, consumers call the shots, creating the need for innovative, interactive contact. Consumer media habits are dictating budget shifts from traditional to non-traditional media. So, how do we make our bosses - corporate and consumer - happy?

This year, an old concept has reared its head again. Some have proposed a model resembling the stock market for assessing commoditised demand - systematic and procedural regardless of the market climate, thus setting what would theoretically be more fair prices. And they would be fair, if optimisation were the "upfront" goal. But because consumers demand engagement in exchange for attention, we need to be able to allow for creativity in combining content with context.

I don't believe the commoditised model would allow the creativity that all parties need. Under that concept, demographic and statistical audience assessment and exposure would justify investments. We know it's not that simple.

Media agencies must account for factors beyond cost efficiencies and acknowledge that the feeling you get from watching your favourite show can be magnetic. We need to admit that if a product catches us at the right time in the right place within the context of the programme, we're a lot more likely to buy it. I propose that all parties demonstrate awareness of these realities and be upfront about their abilities to face the challenges.

New technologies are snatching audiences' time from old viewing interactions.

I'm not naive enough to think that broadband or online will have a huge impact on this year's spending but broadcasters shouldn't be naive enough to think it won't someday.

Meanwhile, client concerns are shifting perspectives. Agencies should be upfront about the types of opportunities they need to engineer plans where the output objectives - versus the efficiency inputs - steer campaign executions.

And clients don't want to pay more when they're being told they're getting less. I expect that more and more, they'll be upfront about ROO and they'll do the talking with their wallets. Not to say that TV can't, or won't, step up to the plate, just that it's anyone's game and evidence of engagement strength can make you a winner.

In a perfect world, upfront negotiations should be an intellectual struggle in pursuit of new ideas. All parties being honest about what they demand and what they can supply will make this a reality.

- John Muszynski is the chief executive of Starcom US.