It’s still relatively early on in the TV upfronts ad sales season, but there’s already a few things different from last year — and no, we’re not just talking about all the “Hamilton” performances media buyers sat through in May.
While networks and advertisers haggle over commercial pricing, TheWrap‘s been busy identifying five early shifts versus the 2015 buying period. Since this time of year is all about the Benjamins, let’s start with …
Billions With a (Very) Capital “B”
Analysts at Nomura anticipate this TV upfronts season will total $8.44 billion in ad sales revenue across the Big 4 networks when all is said and done, up 5.5 percent from 2015’s $8 billion.
Here are the early Nomura predictions per broadcaster:
CBS: $2.49 billion ($2.35 billion in 2015)
NBC: $2.39 billion ($2.32 billion in 2015)
ABC: $1.85 billion ($1.80 billion in 2015)
Fox: $1.71 billion ($1.53 billion in 2015)
Next up, we have a bonus dollar bill (y’all) point to come out of the early upfronts negotiation period — and it involves the biggest telecast of them all.
Fox is currently seeking $5 million for each 30-second spot during its upcoming Super Bowl — a figure that also includes digital streaming — TheWrap was confirmed. (The hopeful price tag was first reported by Variety.) If it actually ends up crossing that threshold per average half-minute, Fox will be able to claim its place in TV history.
Much like the big game, all large-scale live event programming is expected to rise this season — or at the very worst maintain last year’s levels. There’s such a premium on engaged, simultaneous tune-in — everything from sports to the Oscars should see continued emphasis.
Hurry Up and Wait
Yes, we’re only a few weeks removed from the actual Big 4 broadcast upfront presentations, so perhaps it’s a bit premature to wonder why negotiations aren’t further along than they are — but several people involved in these talks are questioning that very fact.
We’ll try to answer for them, and for readers.
This particular upfront period has simply felt slow to pull itself together, one media buyer told TheWrap — but that’s also the new normal these days. While some of the earliest progressions have not actually been as slow as they could be in the past, many players anticipated this particular year might move more quickly than most — there’s a good reason they were wrong, however.
Today, we just have too many damn channels all bundled together — just look at NBCU or Turner’s pitches, for example — and deals can no longer be done in one night, which was an actually possibility in the past. For now, there’s plenty of ongoing discussion, we’re told, but nothing really moving forward, as all involved try to understand the demand side and where price points will actually end up.
First, let’s define a few terms for our non-industry readers: “CPM” means cost-per-thousand, or the cost per reaching 1,000 potential consumers; “C7” refers to the average commercial rating, inclusive of one-week’s delayed-viewing.
One person with knowledge of the process told us that the upfronts have devolved to the point where the only thing discussed is the CPM increase. In the past, conversations were more nuanced — it even mattered what an advertiser/agency brought to the table, and well as specific client needs, for examples. Not anymore.
But why is that? Our person opined the sheer size of network groups and agency holding companies is to blame. They’re now so large — and thus, the important preliminary negotiations held by such a select few people — detail and a personal touch has suffered.
As far as C7s go, another buyer told us they are feeling a bit slighted. There was an expectation that 75 percent of advertisers were going to get guarantees on C7s this year, but that source hasn’t even heard such a guarantee come up one time in preliminary talks.
OK, Not THAT Small of a Screen
Finally, advertisers are returning to television after a flirtation with digital — a medium increasingly viewed as complementary to TV ad buys rather than a substitute.
“We believe several large brand advertisers have begun to question digital’s effectiveness after devoting significant ad dollars to experiment with different forms of digital mediums last year,” Nomura wrote in the aforementioned study. “Specifically, issues around view-ability, targeting and engagement remain gating factors to accelerated budget allocations towards digital.
“These dynamics perhaps led marketers to believe that TV ad budgets shifted too quickly towards digital alternatives (particularly smaller digital players), and we believe the recent strength is, at least in part, a result of some of the ad-dollars returning to TV,” analysts concluded.
At the moment, that’s only half-correct, we’re told. The early volume is actually more on the cable side than broadcast, one source told us. Same difference?