CAB lures marketers, ad agencies to cable
Upfront quagmire prompts letter on pricing alternativesIn a bid to light a fire under a dozy upfront marketplace, the Cabletelevision Advertising Bureau on Thursday told marketers and ad agencies that the time has come to shift their focus away from their stalled negotiations with the broadcasters and onto cable, which is "open and ready for business."
In a memo sent to purchasing directors, media buyers and clients, the CAB offered an alternative to the pricing imbroglio that has kept the upfront in suspended animation for the past 50 days.
"If advertisers want to end this stalemate, they can buy cable first, shift another 15% of their budgets into cable and realize the kind of price/value they need in this year's upfront marketplace," the letter reads.
According to CAB president and CEO Sean Cunningham, "cable's efficiencies give it a profound advantage over broadcast," and that the time has come for clients to take advantage of cable's lower CPMs. "The letter is our way of reminding everyone that there's a way for advertisers to get what they want, even in an unprecedented economic environment.
The CAB is emphatic about who is to blame for the upfront quagmire, as the text of the letter demonstrates: "On the sell side, the stalled market is largely due to the broadcast networks' refusal to lower their CPMs in any meaningful way, despite their worst year on record for ratings performance."
None of which is to say that the broadcasters aren't willing to try to find some middle ground with media buyers, who entered the marketplace looking to secure CPM rollbacks in excess of 10 percentage points. Sources suggest that three of the Big Four nets are floating CPM cuts of or near 2%, conceding that it is unlikely that clients will go along with any rate increases, given the state of the economy and the continued erosion in prime time viewership.
Top-tier cable nets have also telegraphed their desire to write low negatives, but cable has been so inactive that those numbers reside, by definition, in the realm of the hypothetical. (Some networks are cutting deals, but nothing significant enough to kick-start the larger marketplace.)
In the meantime, the CAB may have to wait until next week to see how Thursday's memo is received. A number of top-level cable ad sales executives were AWOL this afternoon, and at least two were said to be out of the country.
While there's no way of telling whether cable will indeed begin moving before a significant portion of broadcast deals are closed, such a dynamic isn't without precedent. In 2004, Turner, MTV and Discovery kick-started the market in early June, coming out in front of the broadcast nets.
That said, given the unprecedented state of the economy, comparing the 2009-10 upfront to any other historic bazaar is like comparing apples and hand grenades. "It's irrefutably an economy like we've never seen before," Cunningham said. "We've never done an upfront in this kind of environment. All we can tell our partners is, 'Hey, look: We're ready to go.' "
And if network execs say they're not exactly scrambling for their panic rooms just yet, the clock is definitely ticking. Loudly. "I'm looking at my calendar and we're already two weeks past the point where we're usually done," said one ad sales chief. "Enough is enough already."