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Television Network Upfront 2011/2012: "Them That Has, Gets!" - Jack Myers

Jack Myers
Jack Myers -- Click on the photo read Jack Myers ThinkTank

Published: March 29, 2011 at 11:58 AM GMT
Last Updated: March 29, 2011 at 11:58 AM GMT

By Jack Myers

As the national TV Upfront season moves toward the May/June negotiating period, one thing television networks, media agency executives and marketers all agree upon is that broadcast and cable network TV remains the engine that pulls the media and marketing train. As the digital rocket ship climbs through the atmosphere, marketers' remain committed to shoveling more and more coal to fuel the TV train and keep it running smoothly.

In this week's Jack Myers Media Business Report, I shared historical network TV Upfront cost-per-thousand data from 2002 to 2004, the two seasons following the 2001 recession. The 2002-2004 Myers data arguably serves as a forecast for the 2011/2012 national television Upfront season, which should be one of the most interesting and robust in recent history.

These issues and more will be discussed this Thursday at the annual IRTS Foundation Media Buyers Newsmaker Breakfast, featuring Gibbs Haljun of MEC Global, Greg Kahn of Optimedia, Mike Rosen of Starcom, Maribeth Papuga of Mediavest and Dani Benowitz of UM. I am moderating the panel discussion, which will be at the Pierre Hotel. Advance purchase is required and tickets are available by calling the IRTS at (212) 867-6650 x 11.

As a child, I played Monopoly with my Dad. When I landed on his hotel on Boardwalk or Park Place, his favorite comment was "Them that has, gets!" In this year's Upfront, the broadcast and major cable networks have the best real estate and have built out their houses and hotels. As advertisers move their pieces around the Media Monopoly board, they can still buy less desirable real estate, but the best properties are controlled by the TV networks. Once the agency buyers pass "GO" and move into the May/June negotiating season, there will be no Get Out of Jail Free card and it's pretty clear that "Them That Has, Will Get!"

With broadcast network TV ratings erosion taking its toll again this year, the leading networks will be under pressure to generate cost-per-thousand increases that not only compensate for lost rating points, but that assure meaningful revenue increases. Strikes threatening the NFL and NBA seasons add increased demand for primetime network and high appeal, male targeted programming. It's unlikely that broadcast and leading cable networks will increase year-to-year sell out. Marketers' options are limited as digital video CPMs remain greater than broadcast and cable costs. Cinema, video place-based and point-of-influence media, and local TV and radio will all benefit with increased revenues but will not significantly reduce advertiser demand for network TV. The most appealing national broadcast syndicators will experience strong CPM increases, especially as supply erodes with the shift of Oprah to cable. Smaller cable networks will experience some gains but agency buyers point to their clients' current reach over-exposure on cable and are reluctant to increase their current cable ratings levels. The top ten cable networks led by Turner, A&E Networks, FX and NBCU are likely to generate costs-per-thousand increases at or above broadcast network levels.

Bottom line, the national TV marketplace is healthy. Marketers continue to depend on broadcast and cable network TV as the foundation of their advertising plans. And this year's Upfront will be fascinating to follow as it continues to unfold. Share your comments here.

Jack Myers can be reached at Jack@mediadvisorygroup.com. JackMyersThinkTank is free and underwritten, as part of MediaBizBloggers.com, by subscriptions to Jack Myers Media Business Report (www.jackmyers.com). Subscribe free to all MediaBizBloggers reports at www.MediaBizBloggers. For Jack Myers Media Business Report subscription information visit www.myersreport.com or contact Jack Myers at Jack@mediadvisorygroup.com. Jack Myers and Media Advisory Group provide details on all underwriters and companies in which we have an investment at www.jackmyers.com.

To communicate with or to be contacted by the executives and/or companies mentioned in this column, link to JackMyers Connection Hotline.

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