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The new ‘Upfront’ reality?

May 5th 2015

It’s that time of year again – the upfronts – when media sellers and buyers schmooze over fancy finger foods and colorful alcoholic libations, while television executives talk about how excited they are about their upcoming slate of new programs and all of the dazzling ways in which they will integrate brands into their shows.

However, while much of what the TV folks are talking about sounds eerily similar to previous years, 2015 is certainly not your parents’ upfront season. The digital players, via their ‘Newfronts’, are reminding us just how many new and innovative ways there are to reach viewers and that TV is certainly not just about the big glass rectangle sitting on your living room wall. The other big angle being played this year is around data, as targeting and reaching those consumers that are most likely us use, buy or talk about your brand or product is paramount to everyone involved. It’s definitely not just about demos and eyeballs anymore – that is for sure.

But, I want to raise a question that may be getting lost in all of the upfront hoopla – is the upfront process, where agencies lock down large chunks of advertising inventory months in advance of when spots will actually air, even relevant or necessary anymore (with the promise of premium integration and discounted prices)? Sure, this time of year is a great excuse to socialize with clients, parade around celebrity talent, and get buyers excited about what your network or website has to offer, but we at SMI are looking very closely at the shifts that have been occurring in regards to the flow of upfront and scatter dollars in the national TV marketplace – and the numbers are telling.

Last year’s upfront was very rough for media sellers, to say the least. Hundreds of millions of dollars were held out of the television upfront market last summer, and halfway through the 2014-15 broadcast season, what we are seeing is that about a third of those dollars are being placed much more opportunistically in the scatter market, and the rest are flowing into digital. So, we ask – was this an anomaly, or is this the new normal reality? If last year’s upfront was any indication, buyers just do not feel it is worth committing millions of dollars of their ad budgets so far ahead of their campaigns, because there is just no reason to do so anymore. They can afford to wait until their plans crystallize and not only still get good deals, but have tons of quality opportunities to integrate their brands and reach their target audiences like never before.

The numbers do not lie: midway through this broadcast season year-to-date scatter spend in national TV is up 20%, while upfront spend is down 8% YoY. Digital spend continues to grow in the 20% range YoY, while the amount going to ad networks and exchanges is up about 30%.

I guess we will see where things net out this year when the last appletini is sipped and negotiations begin in earnest. It should be interesting.

Tell us what you think about the future of upfronts. Do you feel this year’s upfront will perform better than last year?

Elissa Walters

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