Canadian media buyers, some of whom are still reeling from the double-digit rate hikes that kicked off this year’s ‘disappointing’ TV season, are already beginning to strategize for the 2004 upfront market.

However, compared to the U.S. – where buyers have threatened to move a reported billion dollars out of conventional TV – Canadian tactics, including specialty back-up plans, waiting out the first wave and one-time buys, are looking less drastic.

‘Broadcasters are already nervous,’ says Sherry O’Neil, managing director at OMD in Toronto. ‘I don’t think they’ll be quite as aggressive this year, with no justification – like [increased] audience.’

Nonetheless, she adds, OMD will ‘absolutely’ be putting increased pressure on its television partners to keep rates down.

But buyers always put on pressure to lower rates. ‘That’s their job and I wouldn’t expect any different this year,’ says Ken Johnson, SVP, CanWest Media Sales in Toronto.

Despite the fact that OMD, like some of the other giant media agencies, was able to negotiate lower than double-digit rates for clients such as DaimlerChrysler last year, O’Neil says she’s peeved that the Canadian broadcasters chose to take their cue from the preceding U.S. upfront when the two markets are so dramatically different.

‘The conventionals ignored the market and nothing, not even television, is a must-buy anymore,’ she explains. ‘Clients are more open-minded to not using one solution exclusively.’

Big shift away from broadcast unlikely

Likewise, Annette Warring, group VP media director at Toronto’s MPG/Maxxmedia, says her clients will be smarter in how they use TV in the mix this year. ‘And we’ll be better armed with information about what we’ll be willing to spend. But it’s not just about cost and audience, it’s about how this medium can deliver success to my client, who could potentially look to print or direct alternatives.’

This doesn’t worry Johnson, despite an 11% drop in fourth-quarter revenue for CanWest. He says, ‘Clients move in and out of television and reconsider their media mix every year.’

But in order to remain the predominant media choice, conventional TV will not only have to justify rate increases, the medium itself will have to become more reflective of the changing retail market, adds Warring.

‘Clients are a lot more targeted and customized in their messaging. Conventional is still not offering much in that way,’ she cautions.

Nonetheless, there is little indication that there will be any radical shifts out of TV this year, or anytime in the very near future.

‘It’s only the fringe players, or the people talking up a big story, who are threatening to pull money out of television,’ says Dennis Dinga, VP/director of broadcast buying at Toronto’s M2 Universal. ‘None of the blue-chip clients like auto and beer, for example, would walk away from TV. It would be a stupid move – where else are you getting the mass audience, sight, sound and motion?’

Buyers predict increase of 2% to 4%

Dinga, who counts GM among his largest clients, is expecting that this year’s rate hikes will fall in the manageable 2% to 4% range because the market simply can’t bear a repeat of last year.

However if this year somehow turns out to be anything like the last, he warns, the backlash is going to be much more dramatic. ‘But there’s no way that broadcasters will be that stupid. It’s too hard to get money back once you’ve lost it,’ notes Dinga, who says that this year M2 is going into the upfront ‘aggressive as hell.’

‘We’re looking for flat increases from last year to recoup our losses.’

Lauren Richards, SVP, national media director at Cossette Media in Toronto, also predicts that negotiations this year are going to return to a state of normalcy.

‘The stations and networks have been more than co-operative in coming to their senses. They realized they made a mistake when the short-term market dried up in the fall and the heat was so intense from the press, the ACA and the buyers,’ she says.

But while pointing out that annual negotiations for January starts were back to normal, she says that when she enters this year’s upfront to bargain on behalf of Bell and other clients, she’ll have a definite back-up plan, just in case.

Last year, a lot of clients were caught with their pants down, she says, so this year buyers are going to be much more prepared and willing to move money out of television if the rates aren’t justified.

Jeff Marchand, GM of Starcom Worldwide in Toronto, whose strategy is always to buy after the upfront presentation, says he will be taking the same tack this year in order to avoid getting swept away in the panic that caused so much grief among his competitors last year.

‘If you believe the rates are inflated, you’ve got to wait out the broadcasters. Last year, so many buyers just renewed their deals and trusted that it would be a similar year to the one before. Instead, they felt duped.’

‘Why,’ asks Marchand, ‘would you commit $100 million for next year when you don’t know what you’re getting?’

But waiting out the market can also be risky business.

‘You don’t want to go too early and not know what you’re getting, but you don’t want to risk losing out on the [hot properties] by waiting too long,’ says M2’s Dinga.

Another strategy, says Dinga, is to invest your entire TV budget with one broadcaster, thereby increasing your leverage; or conversely, doing one-time-only buys.

The specialty conundrum

With optimizers, buyers can see the most efficient way to disperse their budgets within the television sphere – and alternatives, like specialty, can get the client more bang for their TV buck.

As seen most dramatically in the U.S. and increasingly so in Canada, moving money to specialty, where advertisers can realize better efficiencies, is probably the biggest threat to conventional.

But as more money shifts to specialty, specialty is becoming less of a deal.

‘One of the reasons we’ve gotten ourselves into this position in the first place is that as conventional rates have risen, buyers have been pushing clients to add specialty where they can get greater CPMs for less money. This has ultimately validated the conventional rate hikes [because we’re still paying them], yet driven the rates up on specialty, which we saw last year,’ says Maxxmedia’s Warring.

Dawn of the 52-week schedule

Meantime, says David Kirkwood, EVP of marketing and sales at Toronto-headquartered CHUM, ‘There’s more and more opportunity to take advantage of different advertising periods, whether that’s time of the day, day of the week or season.’

Taking some money out of the fall and looking at summer is, in fact, becoming increasingly appealing given the recent success of Canadian Idol, For Love or Money and The O.C., which were launched to great success last summer.

Fox, the proverbial network underdog, traditionally uses summer launches as a guerrilla tactic, but what’s new is NBC announcing it will be launching its fall season in August.

Most buyers see this as a move by NBC to prepromote its fall season through the Olympics. They don’t see it as a big deal, since the launch is only moving from September to August. But CHUM’s Kirkwood has a different take.

‘It may be that NBC has lost so much share to CBS and is in such a rut with the end of Friends, the end of Frasier and the cancellation of Coupling, that they too are using the summer as a guerrilla tactic – to regain their footing and re-establish new franchises.’

Either way, the new programming available this summer, which promises to give advertisers more opportunity to buy (where it makes sense) in a cheaper market and increase the broadcasters’ summer revenue, will not likely affect the timing and offerings of the upfront market.

‘People still just don’t make time for appointment TV in the summer,’ says Starcom’s Marchand. ‘They graze on TV in the fall and winter.’

Nonetheless, broadcasters are unilaterally attempting to move to a 52-week schedule.

CTV, in particular, sees last summer as the tipping point. The problem is, says Rick Lewchuk, SVP of programming, planning and promotion at CTV, Canada doesn’t have a spot market. When the broadcaster, for example, suddenly decided to air World Idol on Christmas and New Year’s Day, there were few Canadian advertisers (other than Loblaws) that could react quickly enough to jump on board.

Much abuzz about nothing

Where are the hot shows for upfront 2004?

When the upfront market is only four months away, buzz about the next season’s new shows usually abounds.

This year, however, ‘the buzz is how little buzz there is,’ says OMD managing director Sherry O’Neil.

‘There’s very little talk about the new prime-time season,’ agrees Rick Lewchuk, SVP of programming, planning and promotion at CTV. ‘Sometimes at NATPE we get an idea from the studios about the new hot shows, but it seems they’re behind in development this year.’

Still, a few young hopefuls have emerged, though most are pool-outs from existing franchises.

Next fall viewers will be graced with CSI: New York (on CBS), a new instalment of Law & Order and two more Survivors (seasons 9 and 10). Two and a Half Men, Cold Case, Joan of Arcadia and Navy NCIS have been picked up for their sophomore years next fall.

Rumours about a new sitcom produced by Friends star Lisa Kudrow, as well as a Friends spin-off featuring Matt LeBlanc’s character, Joey, are floating around, but not confirmed.

As well, coming this March is a new extension of Who Wants to be a Millionaire?, starring Regis Philbin, only this time the jackpot is worth $10 million and the title of the show is Super Millionaire. At press time, no Canadian net had put any money on Philbin’s return, which is fine with ZenithOptimedia VP, broadcast Florence Ng, who says the show peaked long ago and won’t reach its former glory.

Other midseason debuts include Century City and The Stones, which hails from the creators of Will & Grace.

The Stones will premier in Canada on Wednesday, March 17 at 9:30 p.m. on CH. But Global planned to air The Stones last fall, says Ng, and ‘it’s not a good sign that they took it off the air back then.’ She adds that she’s seen a pilot and ‘frankly, we weren’t particularly impressed.’

Finally, a third edition of American Idol is currently running on CTV, and it will be directly followed by the second season of Canadian Idol in early June.