Analysis: Are TV Upfronts useful? What about digital upfronts? [2-A]

It’s Upfront’s season and Hispanic television networks are ready to party. But do upfronts accomplish what they are supposed to? Portada’s editorial team asked the question to several experts.

Luring advertisers to buy airtime in Spanish TV didn’t use to be that glamorous. As Eduardo Caballero, an industry veteran, tells it, back in the 70s, it used to be a matter of “putting a stack of papers in a binder and going to Cincinnati to talk to the people of Procter and Gamble about the Hispanic market, to St. Louis to talk to the people of Anheuser Busch, to Atlanta to talk to Coca-Cola. You had to make them understand the Hispanic consumer. Back then there were very few statistics.”

A bit of history
The general market upfront season dates back to the early 1960s, when networks took over production of TV programming from advertisers. Gradually they adopted the format they have today: each network holds a presentation of their lineup to advertisers and media buyers and then offers a lavish party afterwards. But it wasn’t until 1997 that Univision joined the upfront circuit and presented its programming line-up at what was then Tavern on the Green, in Central Park. The presentation, under the helm Chief Operating Officer, Henry Cisneros, featured a mariachi band and the soccer announcer Andrés Cantor, who offered a sample of his famous “goooooooaaal” scream to advertise the network’s plans of broadcasting the World Cup in France in 1998. The effort paid off. According to Univision’s reports of the time, the company’s profits soared 124% in the following quarter.
Telemundo followed suit and held its first upfront in 1998, at the Sony Imax Theater in Lincoln Center. 1998 also marked Telemundo’s sale to Sony Pictures Entertainment and Liberty Media, Telemundo’s first array into “Spanglish,” with a program featuring Maria Conchita Alonso, and into English, by adding English subtitles to its most popular shows.
The industry kept evolving. The problem was that not everybody agreed on what being “Hispanic” meant, whether Latinos responded better to Spanish or English advertising, or if it even was a homogeneous population. This conundrum actually resulted in a greater variety of options. While Univision and Telemundo remain the giants of the industry, other networks have entered the field.
Azteca America entered the market in 2001 and achieved Nielsen’s network status in 2006; also in 2001, Telemundo launched Mun2, catering to bilingual Latinos aged 18 to 34; SíTV (now Nuvo TV) was launched in 2004, as a bicultural, bilingual alternative, also catering to the same coveted demographic; Mega TV, from Florida, launched in 2006, and Ve-me in 2007. That’s not even counting the general-market networks that launched Spanish versions of their channels such as Fox Sports en Español (1996, now Fox Deportes), ESPN Deportes (2001) and Discovery en Español (1998) among others. Rochelle Newman Carrasco, Chief Hispanic Marketing Strategist at Walton Isaacson, says, “It's a vibrant industry. There are the old guard network players, but both Univision and Telemundo are trying to respond to changing needs and demographics. Telemundo, in particular, is exciting to watch both at the broadcast level and their new social media initiatives. They're both working on progress. And then there are the mun2 and SiTV worlds, MTV3, etc. all geared to address the needs of the bilingual bicultural youth market and still finding their power in this space.”
There are those who never believed in the effectiveness of the big events. “The upfronts create an artificial emergency situation and the decisions made there can have a devastating effect. From the agency’s point of view, they are ideal, because they freeze the base prices. But from the client’s point of view, I would completely avoid them,” says Marcelo Salup, Chief Marketing Officer at DMG Solutions. Even more than smaller meetings, Salup favors to keep in touch often with the clients, “so I can find solutions to the immediate problems.”
Craig Geller, who in the 15 years he spent in Telemundo rose to Vice President of Advertising Sales, and who is now Senior Vice President of Advertising Sales at SíTV (now Nuvo TV), also favors what he calls Client Solutions meetings. In March nuvo TV met with 10 of their top key clients and agencies to offer them a preview of the line-up and of the network’s rebranding. Geller and his team will also have a press conference in New York in May. “I really think that these one on one meetings are evidently more important, and if you do them right, I believe they are going to be the ones that’ll capture the better share of the marketplace, from both, advertising revenue, and viewers stand point,” says Geller. nuvo TV will launch in July and will be Nielsen rated in the 4th quarter of 2011.

Why are there no digital media upfronts?
There also has been a lot of talk about digital media upfronts. But so far, these extended advertising commitments, known as “upfronts,” have not migrated into the culture of online ad-sales. “Why are digital upfronts so uncommon in Latin digital media?” According to Maria Boolori, a media buyer at Long Beach, CA, based Grupo Gallegos, much of the reason for the scarcity of digital upfront buys has to do with client awareness of the Latin online space and confidence in ROI: “With upfronts, you generally commit to a year’s worth of advertising. When you’re dealing with networks, it’s easier to justify that commitment to the client, because the Hispanic networks are well-established,” says Boolori.
Marla Skiko, Executive VP at Starcom Media Vest Group, says that the whole whole concept of upfronts is falling out of favor with many clients: “I think even broadcast upfronts (General Market and Hispanic) are becoming less relevant as advertisers want more flexibility across platforms and on their own timing. Nobody wants digital on forced timing either as they are trying to move away from that for broadcast. But the idea of securing some inventory on a long term basis on the advertiser’s terms still can be appealing. I think the term “upfront” can have some connotations that are outdated and perhaps less than ideal from a flexibility standpoint.”
Even so, Skiko says that the system does still have its merits: Given the rapidly changing nature of the digital environment, it may make more sense for certain types of buys on certain sites, like display buys on major Spanish sites where branding is the main goal. Performance-based buys (direct response driven) may make less sense to commit to early on as the players in that space change more rapidly and your buy is more likely to morph based on ROI metrics.”
Mariana Carreño King
Feature Correspondent / Portada