Big agencies got ready last week for the biggest week of the year for the biggest advertising medium, facing changes that could only be called, well, big.
The medium is of course broadcast television, which remains a powerful way to peddle products despite the recent inroads made by alternative ways to watch programs, which include the Internet, digital video recorders (DVR), cellphones, DVD players and video on demand.
Last Monday saw the big broadcasters start revealing their prime-time lineups for the new season in a week of lavish, star-filled presentations at Manhattan landmarks like Carnegie Hall and Madison Square Garden.
For years, the presentations during what is known as upfront week -- so named because the agencies decide to buy billions of dollars of commercial time before the fall season starts -- have remained essentially the same. Season after season, the spiels were mostly confined to rote reiterations of the value of buying spots on broadcast television. But the growing popularity of the alternatives to watching TV on TV sets is forcing the networks to change decades of habits.
For instance, ABC was scheduled to describe at its upfront presentation last Tuesday an extensive promotional initiative called "ABC start here," in which TV is just one medium among many.
consumer control
The campaign was intended to help guide consumers through the maze of devices on which they can watch ABC entertainment and news shows.
"It doesn't matter -- TV, online, iTunes, whatever," said Michael Benson, executive vice president for marketing at the ABC Entertainment unit of ABC, part of the Walt Disney Co.
"They have control," Benson said of viewers, "and we're not going to fight that. We want to make it easy for them to get what they want, where they want, when they want."
At the same time, ABC and the four other big broadcast networks were working on methods to hold the attention of TV viewers throughout the commercial breaks that interrupt the shows they want to see. That was becoming increasingly important for two reasons.
One was more viewers were watching shows delayed rather than live, using TiVo and other DVRs. Research indicated that those viewers were more likely to fast-forward through spots than those who watch live TV.
The other reason the networks need viewers to keep watching ads is that Nielsen Media Research, the ratings arbiter, intends soon to begin measuring viewership of commercials as well as programs.
One way that many networks hope to engage viewers during commercial breaks is by wedging original content into the blocks of advertising time, so that viewers will anticipate seeing something fun if they sit through a few ads.
Fox Broadcasting, for instance, tried out a series of clips for two weeks last month about an animated character named Oleg, a New York cabdriver, who popped up in eight-second vignettes during commercial breaks in series like 24.
CW has been running "content wraps," which mix sponsor products into program snippets. Some experiments involve the cast of the shows in which the commercials appear, serving as hosts for the breaks. That is a throwback to an era when "cast commercials" proliferated with the stars of series like I Love Lucy, The Beverly Hillbillies and even The Flintstones.
The changes are fraught with risk because the broadcasters have long been following tradition in the way they schedule shows, promote them and sell commercial time in them. But with risk comes potential reward, analysts say.
"We do focus groups with consumers 18 to 34, the most desired demographic, the most tech-savvy, and their media consumption habits are changing," said Michael Kelley, a partner in the entertainment media and communications practice at PricewaterhouseCoopers.
"With that comes receptivity to new forms of advertising, provided the networks get closer to viewers' interests," he said.
To do that, Kelley said, the broadcasters must change their focus to "engagement," or involving viewers in ads, from "impressions," the total audience exposed to commercials.
Kelley likened the challenge to how Google persuaded computer users that ads could be useful rather than annoying, by promising that only relevant ads would be displayed alongside search results.
Several network executives responsible for sales acknowledge the challenges ahead.
"We need to become a lot more innovative in the way we present commercials," said Ed Swindler, executive vice president and chief operating officer at NBC Universal advertising sales, part of the NBC Universal division of the General Electric Co.
`pod innovation'
NBC has been testing what Swindler called "various forms of pod innovation," referring to the collection of commercials that compose a break, "and even when ratings did not go up, some measures of engagement did."
For example, Swindler said, in one experiment, the awareness of a brand rose 15 percent compared with a spot in a regular commercial break.
"This puts the onus on networks to creatively program the commercial pods," he added, "and on agencies to create commercials more fun and interesting to watch."
Swindler declined to provide additional details of the tests for competitive reasons, but at least one was previously reported: a trivia quiz during a commercial break on the sitcom Scrubs.
Fox, part of the News Corp, is more open about its experiments with Oleg the cab driver. In one clip, Oleg sang about himself to the Barry Manilow tune Copacabana. In others, he drove around celebrities like Tom Cruise and Rosie O'Donnell.
"From minute-by-minute ratings, we couldn't tell much," Jon Nesvig, president for sales at Fox, said, but "an on-screen blurb, `Go to fox.com,' generated quite a bit of Web traffic; on some nights, Oleg got more than 100,000 hits."
It is unclear whether Oleg, created by Ideocracy, a New York agency, will be back. Some viewers complained that the character, who spoke with Greek inflections, was an ethnic stereotype, and "people found the accent a little hard to understand," Nesvig said.
Even so, "some form of content in the commercial breaks is on our radar," he added. "Under the right circumstances, we'd do more."
The network that has been the most innovative in this realm is CW, owned by the CBS Corp and Time Warner, which has been offering its so-called content wraps to advertisers since September.
Each one blends entertainment and advertising in a break that runs two or two-and-a-half minutes.
Brands sponsoring content wraps include Activision, Caress, Herbal Essences, Listerine and Toyota. The most recent, for the Cover Girl line of cosmetics sold by Procter & Gamble, appeared on May 8 during Gilmore Girls.
commercial attention
For the 2006 to 2007 season, "we thought in our wildest dreams we'd do 10, and we've ended up doing closer to 20," said Bill Morningstar, executive vice president for sales at CW.
"We're all looking for ways to engage consumers differently and get them to put down the remote control and pay attention during commercial breaks," Morningstar said.
"We did a focus group last week in which we watched the participants watch the content wraps. They physically leaned forward during the commercial breaks," he added.
After the upfront week presentations conclude, the negotiations between the networks and agencies begin in earnest. In recent years, the amount of commercial time the broadcasters have sold in each upfront market has ranged from US$8.5 billion to US$9.5 billion. (There are also upfront markets for cable, syndicated and Hispanic TV; all told, upfront sales can total around US$20 billion a year.)
The broadcast upfront talks can last anywhere from a week, if demand is strong, to three months, if it is weak. Trade publications have speculated that the haggling may take longer than usual this time as the networks and agencies grapple with issues like commercial ratings and how to measure DVR viewership.
So far the need for those changes has been given a lot of lip service, but now network executives seem to be translating words into action.
"If there's any year to do it, this is the year," Jo Ann Ross, president for sales at CBS. "All of what we're all talking about is good for the business."
Changing the paradigm could make the networks more accountable to advertisers and more appealing to viewers, Ross said.
"But we want to make sure that when we do do it, we do it in the right way," she added. "It's very tricky."
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