Media buyers in holding pattern
EmptyMadison Avenue has been quietly making plans ahead of a possible writers strike.
Although the impact on daytime television and late-night talk shows would be close to immediate, primetime TV isn't likely to be affected until January or February -- if and when the strike lasts longer than a few weeks. Most series have several weeks' worth of scripts already ready before the natural holiday repeats.
"We're really looking at a first-quarter issue," said Jason Maltby, president of media buyer MindShare and co-executive director of national broadcast TV.
That's when the networks, which have contingency plans that include more reality programming and even British imports, could feel the pinch. Madison Avenue estimates that with an alternative programming lineup instead of the usual preponderance of dramas and sitcoms, ratings could drop 10%, which coincidentally is what they did in the five-month strike in the vastly different media landscape of 1988.
So far, media buyers are not pulling money out of the market but instead are telling clients that there's a chance of makegoods, or, in a worst-case scenario, networks returning ad dollars if the strike-impacted lineup doesn't match the ratings guarantees agreed upon during last summer's upfront.
Usually, when a network fails to deliver ratings guarantees to an advertiser, they make it up to the client in other programming. The networks every year set aside inventory for that, generally 10% or a little more. But that won't be the case this time around as most of the programming could be underperforming the time-period guarantees in a worst-case scenario.
Also a factor is how hot the network TV marketplace has been, with tight inventory all across the dayparts, especially primetime. At least one agency has advised its advertiser clients not to pull money out of the marketplace.
Nancy Huck, senior buyer at Starcom MediaVest agency Spark, said that most advertisers and agencies that executed their strategy smartly were not going to be as impacted by a strike as much as others who buy in the scatter marketplace much closer to airdate.
Where all the optimism goes out the window is if the strike is prolonged or if other talent unions join in. Such developments could disrupt or ice the pilot season as well as the $9 billion broadcast primetime upfront next summer.
"I don't think anybody would be willing to commit billions of dollars not knowing whether the product was going to be there in the fall," Maltby said. "It would be very disruptive."
A Merrill Lynch report released this week agreed that the 2008-09 upfront, which would begin in late May or early June, could be difficult.
"Without quality program ideas, a strike could seriously disrupt the traditional May kickoff of the upfront marketplace, which could also affect profitability for the following year's TV season," Merrill Lynch wrote.