The children’s upfront marketplace for network, cable and syndication is upon us. Some business may already have been completed.

This annual ritual is when advertisers buy children’s time that won’t begin airing until the following TV season-in this case, from September 1999 through August 2000.

Bought properly, it provides a key component in a manufacturer’s marketing arsenal. With advertising often being the second largest expense after manufacturing, it also represents a sizable financial risk.

Participating in the children’s upfront allows the advertiser to secure better pricing, audience guarantees, cancellation options, sponsorships and specific inventory. The goal is to deliver meaningful and timely support for product that is at retail.

It sounds simple, but if not executed properly, the media investment can cost your client millions in lost sales.

How does an agency structure an upfront media buy? The process starts with gathering information about the client’s business and the media supplier’s business.

To Do list

* Develop a marketing calendar with your client. In as much detail as possible, outline all promotion periods, the products’ target audience, commercial clearance, budgets, retail distribution, product quantities and ship- ping dates. This will be your template for developing the media buy for the upcoming TV season.

* At the same time, analyze each supplier’s audience. How strong is their coverage, and are there markets where they’re particularly weak or strong? How do their programs skew-male or female, young or old? Fox Kids has a strong boy skew, for example, whereas ABC Saturday morning skews girls. Are their audiences stable, growing or declining? Did they deliver what they promised last year, or did they give you makeup weight after the schedule was over? What is their historical pricing with the client?

* Create several media mix options based on budgets and targets. The agency’s research department can develop models for how to use network, cable and syndication for each campaign. If, for example, a campaign has a budget of US$500,000, an all-cable plan may be the most efficient way to reach children. If the budget is several million dollars, cable alone will not give you the desired reach, and network and syndication should be added to the mix.

* Put it all together: A detailed flowchart allows the media department to break out budgets by week and by target. These will eventually be allocated to the various suppliers you plan to do business with. At this stage, it’s a good idea to do the ‘what if’ scenarios.

What if. . . ?

What if a product ships late or is canceled? What if a commercial doesn’t clear the networks? What if a product’s target changes from boys to girls? Factor these and any other issues pertinent to your client’s business into the buy.

Your options

Options are a key component in any upfront. An option gives the advertiser the right to give back a portion of the buy in the first, second and third quarters of the next year. They usually range from 25% to as high as 100%. The suppliers require 90 days’ notice prior to the start of the quarter to exercise options.

Ideally, options are tailored to the ‘what if’ scenarios you and your client have gone over. For example, if the long-term outlook of one of the client’s products is questionable, and its target is girls, you may want to build in a larger cancellation option with the suppliers that skew girls.

Closing the gap

In a typical upfront buy, there is a gap between what the agency and the suppliers think the shows will deliver. This can be as much as 25%, with the suppliers believing the higher number will be achieved. Closing this gap is part of the negotiation in an upfront buy. To compensate for the gap, the suppliers put additional units into the buy. The additional units aren’t always evenly distributed, so your weekly goals may not be attained. The agency’s responsibility is to ensure that these weekly goals are met as closely as possible by tracking the suppliers’ weekly delivery and securing additional units when a shortfall arises.

If both you and your client do your homework, you will successfully negotiate a long-term media buy that complements your marketing goals, but still provides financial flexibility if your needs change.

Tom Horner is senior VP, media services, at Active International in Pearl River, New York.