A few months ago, many media buyers expected a healthy broadcast upfront. Now, after months of falling ratings from the writers’ strike and a souring economy, many aren’t so sure. In fact, this could be one of the most unpredictable upfronts in years, with many advertisers wary of committing big dollars too far in advance. Too, the number of cross-platform opportunities is growing, and advertisers are interested in exploring these new options, especially with continued concerns about the currency used to make last year’s upfront deals, commercial-plus-three-day-delayed-viewing ratings, or C3. That may be why some analysts have been reluctant to issue forecasts. One prominent forecaster who spoke with Media Life earlier this week said he had nothing at all to say about the 2008 upfront. Still, the news isn’t all bad for television. Cable and syndication are expected to do well, and media buyers think ABC, which will be the first network to present its fall schedule next week, could reap CPM increases after several years of steady scheduling. Heather Kruse, group media director at Fallon, talks to Media Life about upfront numbers, cable’s prospects and the impact of a strong scatter market. 
 
Do you think the broadcast upfront will be up or down from last year's $9.3 billion? Why or why not?
 
You know, I think from what I’ve read and heard, it will be flat to down. Most advertisers will probably approach the market conservatively. The market is so volatile this year, and advertisers are tentative.
 
Also, because of the writers' strike, buyers are going in somewhat blindly, because they’re going in to secure ratings at a cost versus securing programming. So they’re really making an economic decision.
 
And again, because the economy is slow, advertisers will be hesitant.

Will the current economy have any impact on the upfront numbers?
 
Definitely.

I think advertisers are just not ready to commit such big dollars for the long term. Most advertisers will continue to spend, it just may not be at the level it’s been at in the past.

But I think it’s also an opportunity for new advertisers who may have been scatter players in the past to come into the market.

The scatter market has been strong this year. Do you see that impacting the upfront, and if so, how?
 
I think that goes to the last point. New advertisers, and even existing upfront advertisers, may look to secure a base of advertising to avoid a potentially volatile scatter market.
 
But even if overall upfront spending is down, and advertisers are holding dollars back, we don’t know if they will put money to the scatter market or if they’ll hold out all year, therefore creating flat conditions in scatter.

How will the decrease in ratings this year affect inventory?
 
I think the ratings decrease goes to the fact that advertisers don’t know what they’re buying right now, and that keeps the market competitive. So it’s based more on price instead of the quality of inventory.

It’s become a commodities market, where you’re buying ratings at a price rather than based on the strength of a schedule.

Which network will see the biggest CPM increases? What about decreases?
 
I don’t have any specifics, but overall I think the ones with the biggest increases will be the ones with most returning shows. Right now ABC has some momentum, and that’s the only one that really comes to mind.
 
For decreases, if there are any, it will be the weaker networks because they won’t have the returning programs this fall giving them momentum.
 

What types of gains or losses do you see for syndication?
 
It’s interesting, my clients don’t buy syndication, but ratings are more stable there because they haven’t been affected by C3.
 
Advertisers are buying a 52- week schedule, with shows like “Oprah,” “Entertainment Tonight,” “Access Hollywood” -- shows that air year-round and are less likely to be TiVo’d and watched at a later time.

How about cable?
 
I think cable is most likely to be up.

With new and original programming, and ratings on the rise in general, in addition to broadcast ratings going down, advertisers are increasingly turning to cable as a viable alternative.
 
Until broadcast networks change their approach, cable will continue to steal share. But I think broadcast networks are starting to take note of the way cable networks program. Like NBC’s quicker-to-market strategy, I think that’s a similar model to what some cable networks have done, and NBC could see at least some economic success there.
 

It seems that we’ve seen many analysts step back from issuing upfront forecasts the past few years. Why is that? How much do cross-platform and new metrics, like C3 ratings, impact it?
 
Overall I think the reasons analysts are stepping back is because there are way too many factors and it’s just too hard to predict.

Media choices have changed. Advertisers are looking for new and different ways to connect with consumers. New products and categories are being introduced – it’s not just auto and packaged goods impacting the market anymore. Ten or 15 years ago pharmaceuticals weren’t big advertisers, but they’re huge now.
 
Ratings changes influences that a bit, but at least this year is the second year with C3, so it’s not as much a factor.
 
But also changes in programming, some due to the strike, and the addition of reality programming five, 10 years ago, has changed the marketplace. It’s harder to predict which shows and networks will be successful.