Upfront, Cross-Media Fight for Spotlight

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For the second straight year, cross-platform mega-deals have stolen some of the thunder from the broadcast and cable upfronts.

But the two forms of wheeling and dealing operate on separate tracks, some industry executives indicated last week.

"The upfronts are a time-honored tradition," MTV Networks president Mark Rosenthal told the Upfront Summit last Wednesday at the Grand Hyatt Hotel here. As such, cross-platform deals need not disrupt those marketplaces.

AOL Time Warner chief operating officer for global marketing solutions Julie Kantrowitz agreed: "We work with clients 52 weeks a year … [Deals] don't necessarily have to go down in what's called the traditional upfront."

Moreover, such supersized integrated-media deals don't "commoditize" inventory, according to Kantrowitz. Rather, she felt they "move us away from a transaction-based relationship to a strategic-based relationship" between buyers and sellers.

Throughout the Summit — cosponsored by Advertising Age
and Electronic Media
— executives referenced published reports that OMD USA was finalizing cross-platform deals valued at $1 billion apiece with Viacom Inc. and The Walt Disney Co.

Officials addressing the Summit from OMD USA and from Viacom- and Disney-owned companies neither confirmed nor denied the accounts.

But later on Wednesday a source at Viacom said, "It doesn't seem like the OMD thing is going to happen."

MULTIMEDIA MOMENTUM

Whether that deal transpires or not, momentum seems to be building toward such integrated transactions. According to Jack Myers Report's recent quarterly survey of more than 100 advertiser and agency executives, many in the community have already begun cross-platform-buying discussions with such media behemoths as AOL Time Warner, Disney, News Corp. and Viacom.

A year ago, the $300 million Viacom/Procter & Gamble Co. buy was among several mega-deals diverting attention from the upfronts. That deal, now up for renewal, was "all about [the battle for ad-revenue] share and, I'm sure, about price," said Dave Cassaro, executive vice president of sales and distribution at E! Entertainment Networks.

Rainbow Advertising Sales Corp. president of national network sales Arlene Manos estimated that "10 to 15 percent" of its business comes from cross-media deals.

And MTVN's Rosenthal figured that 25 to 30 percent of Nickelodeon's business alone are the result of cross-platform buys, with MTV: Music Television below that level. Various sales executives within Viacom Inc. now meet to discuss such opportunities on a regular basis, he noted.

Kantrowitz said that AOL Time Warner has an ad council in which to discuss such cross-media possibilities.

A&E Television Networks also recently formed an ad council where marketing, content and ad-sales department executives convene, according to AETN executive vice president Whitney Goit.

Discovery Communications Inc. last week became the latest independent player to accelerate its own cross-media sales efforts, by adding "global integrated partnerships" to executive vice president Bill McGowan's job description. McGowan now will pursue multinational clients on a regular basis rather than periodically as before, when DCI sold accounts like Ford Motor Co. and IBM Corp. on sponsoring Discovery Channel's "Watch with the World" program stunts.

Meanwhile, the parameters of cross-platform deals seem to be expanding.

Syndication, for instance, is starting to catch on in some clients' integrated-media plans, having been included in a half-dozen such deals so far, according to Warner Bros. Domestic Television Distribution executive vice president of media sales Michael Teicher, who once oversaw such strategies at Turner Broadcasting Sales Inc.

UPFRONT VIEWS

As for the upfronts themselves, Summit speakers from the agency buyer side shied away from dollar forecasts.

OMD USA managing director of broadcast television Dan Rank predicted: "Probably mid-June we'll get cranking on this [cable's upfront].

"My mood's very relaxed," in contrast with the past two upfront seasons. "A slower pace like last year is to everyone's benefit," he noted.

ESPN ABC Sports customer marketing president Ed Erhardt said "there's going to be more money" for cable, in part because the National Basketball Association package is shifting to ESPN/ABC.

MediaVest president of U.S. operations Mel Berning said he foresaw "a better [broadcast upfront] market ahead of us than last year," due to a healthier economy. He declining to "put a number on the table," but said "there's a lot of room" between the $8 billion network TV upfront of two years ago and last year's $7 billion take.

MediaCom Worldwide executive vice president of national and local broadcast Donna Speciale, who cautioned that the economy is still in "a very fragile stage," blasted the broadcasters for "taking the easy way out" and opting for news magazines and reality shows as low-cost quick-fixes.

Berning agreed that the broadcasters have relied on stopgap moves "very friendly to the bottom line."

ABC Television Network executive vice president and general sales manager Cynthia Ponce accepted ABC's share in the blame, adding that "we should've had something behind [Who Wants to Be a Millionaire]."

The network is now looking to revitalize its primetime lineup after sustaining severe ratings erosion this TV season.

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