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It's upfronts week in New York—that peculiar superannuated and lavish annual rite in which TV networks roll out their upcoming schedules for advertisers—and I'm attending the big CBS (CBS
) party. As always, it's at Manhattan's Tavern on the Green, a riot of early-'70s design so gilded and tacky it achieves a kind of architectural nirvana. There must be over 1,000 people here. There is a formidably stocked open bar in each room. There is enough shrimp to fill a small swimming pool. Say what you will about Old Media, but they still throw a hell of a party.
The upfronts are built around the networks shelling out millions each May in order to win billions in ad commitments. (Last year's total upfronts take was around $9 billion.) How much longer can this party—upfronts week, I mean—go on? Network ratings continue to droop. As upfronts week began on May 14, Google launched the first national test of Google TV ads, according to several execs. The new service, which is running in conjunction with satellite TV operator EchoStar, allows advertisers to use Google's famed auction system to bid on ads, and to use data provided by EchoStar to track when the spots run and how many viewers see them. (The timing of said test may be read as a not-so-subtle tweak of existing media traditions.) While nascent and far from an assured success, Google TV ads may eventually pose a significant threat to how TV ads are bought and sold; reflecting either denial or discretion, few execs at the upfronts had much to say about it. Meanwhile, as upfronts attendees swilled free booze and gawked at celebs, Microsoft was putting the finishing touches on its $6 billion deal for interactive agency aQuantive. That capped off a $10 billion spate of deals for online ad firms or technologies that began in mid-April when Google announced its $3.1 billion purchase of DoubleClick.WHILE THE FORCES OF THE NEW continued to arm themselves to the teeth, one aspect of what passed for forward thinking at the upfronts was the idea of cutting back on the parties and presentations. Top executives at media-buying agencies and networks confirmed having internal discussions about significantly compressing upfronts week. Two ad execs separately outlined a scenario in which the current four-day process—in which each broadcast network presents its shows at venues like Carnegie Hall or Radio City Music Hall, followed by massive parties—would be winnowed down to one long day of presentations and one big party afterward. The people who decide how to spend ad dollars don't need the song-and-dance, stroking, and celebrity-sniffing, said one executive; the real business of deal-making goes on for weeks after the partying is done. Another pointed out that this year the big networks' presentations, formerly hours long, lasted 90 minutes or less and could easily fit into one day at one venue. (The egos of the institutions and executives? Another matter entirely.) The idea is to "tweak [the event] further to make it better for all sides," says Andy Donchin, director of national broadcast for media agency Carat USA. "The networks are saying, 'We don't have to do all this,'" says one TV executive. "Because currently it costs millions of dollars."
The truly perverse thing is that the upfronts' ad haul looks likely to hold relatively steady at last year's levels. Jessica Reif Cohen, the veteran media analyst for Merrill Lynch, is predicting that this year's upfronts will do even better. A key factor: Demand in the "scatter" market, on which advertisers buy spots that were not sold at the upfronts, has been tight, making those spots pricey. But one ad executive says that's partly because ratings shortfalls have forced the networks to hand over scatter ads to make good on last year's upfront deals—which generally come with audience guarantees. Given everything, TV execs would be making a big mistake to exult over decent upfronts in 2007. To borrow from Hemingway, the party is ending in two ways: gradually, and suddenly.For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia By Jon Fine