Posted on 09/27/2006 4:38:12 AM PDT by abb
WILL JOHNSON & JOHNSON MAKE its potentially game-changing move to skip this year's upfront an annual tactic? Maybe.
"We're going to do what's best for our business," said Brian Perkins, CMO of the pharmaceutical and packaged-goods giant, at an Advertising Week event in New York.
So far, Perkins said the decision to sit on the sidelines this summer "is working out great." But somewhat surprisingly, he said the company's delayed upfront continues.
In May, J&J sent shock waves through the industry by declaring it would postpone its upfront buying until August, partly to better align its buying process with its internal planning cycle.
But even as the new season rolls out, the buying continues. Perkins said J&J is taking advantage of the networks' increasing pledges to do business 52 weeks a year, and it's still working with broadcasters to place its dollars earmarked for the 2006-'07 season.
Early in the upfront, as other major marketers geared up to wheel and deal, J&J asked at least one network two questions: If it makes deals in late summer, will the network honor its base price--and have enough inventory left over?
Potentially, networks could sell enough inventory in the traditional upfront to allow them considerable pricing leveraging with latecomer J&J. But networks are likely to honor both of J&J's requests. Aggravating a big-spending, long-time advertiser would be risky business.
Perkins declined to comment on the issue yesterday, but said, "The networks have been terrific."
If the J&J experiment is deemed a success and the company makes upfront-skipping an annual strategy, the move signals a new era--one in which the importance of the upfront is markedly reduced. And other major marketers could follow suit.
Ping
The upfront market to me was anathema of sound business decision making. I say this having sold television time for ABC, NBC and CBS affiliates over the course of a decade and a half.
There's no way of knowing what hits and bombs will be in April/May. You're making educated guesses based on preview episodes and anyone that has ever watched TV, aka every American, knows that rarely is a series first episode or first season the best in retrospect looking at a series history.
When we sold local inventory on an annual basis people would buy local news, Oprah, Wheel of Fortune/Jeopardy, Nightline, Letterman, the NFL or NCAA football & basketball all day long. They stayed away from prime time programming almost every single time with one exception; big sporting events like MNF, NCAA Tournament, BCS games, World Series, Super Bowl and Oscar night.
Prime time programming is a risky buy as such networks hold back TONS of inventory for make goods (Advertisers buy ratings points, not programs.) more or less that in itself is bad business practice.
There has to be a balance between risk and reward in advertising and for far too long in the network model it seems to be tilted in the networks favor.
Well, nothing ever stays the same. The buyers/advertisers are about to get even. Nets no longer dictate terms in today's world.
Ray, IIRC, one the articles I had posted several months ago told about how the upfront negotiations were conducted. Phone tag, faxes, whispers, rumors, lots of stuff kept in the dark by both buyer and seller. Not an efficient marketplace for a commodity by any means.
As technology intercedes, lots of middlemen will be squeezed out. It's called progress...
Now the MSM is finding out that the advertisers can control their $'s with the MSM.
Maybe one day they will wake up and realize that po ing the 64 million GW voters 24/7/365 isn't a good business tactic.
What techniques do you use to collect viewing information?
Nielsen Media Research uses People Meters, set-tuning meters, and paper diaries.
People Meter
Our national sample, composed of a cross-section of nearly 10,000 representative homes throughout the United States, is measured by People Meters, a technology that has been in place since 1987. These meters give us information about not only what is being viewed on the set, but also exactly which members of the household are watching.
The People Meter is a “box” — about the size of a paperback book — that's hooked up to each television set and is accompanied by a remote control unit. Each family member in a sample household is assigned a personal viewing button, which is matched to that person's age and sex. Whenever the TV is turned on, a light flashes on the meter, reminding viewers to press their assigned button and to indicate that they're watching television.
Additional buttons on the People Meter enable guests who are also watching to participate in the sample by entering their age, sex and viewing status into the system.
In addition to our national measurement, Nielsen also measures some of the nation's largest local markets (such as New York, Los Angeles and Chicago) with People Meter Technology.
The People Meter is used to produce household and persons audience estimates for broadcast and cable networks, as well as nationally-distributed barter-syndicated programs.
Set-Tuning Meter
Large to mid-sized local markets (such as Seattle, San Antonio and Memphis) are measured by a different type of meter — one that gives information about set-tuning only. In these markets, demographic information is provided by a separate sample of people who fill out seven-day paper diaries.
Diary
Smaller markets (such as Honolulu, Hawaii; Tallahassee-Thomasville, Fla., and Fargo-Valley City, N.D.) are measured by paper diaries only. These seven-day diaries (and eight-day in homes with DVRs) are mailed to homes to keep a tally of what is watched on each television set and by whom.
Each year we process about 1.6 million paper diaries from households across the country for the "sweeps" ratings periods.
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