“There is not a mad rush to begin negotiations,” one media buyer tells TheWrap
In a normal year, networks and advertising executives would be on their way to Radio City Music Hall today to listen to NBC tout its fall lineup.
But the reality of the coronavirus pandemic, which hit the TV industry in mid-March, will instead force advertisers to be treated to a virtual presentation that will be heavy on marketing data and light on celebrities. Many other networks will attempt to cater to advertisers virtually as well, either with one big presentation or smaller meetings over Zoom.
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The lack of the in-person “dog and pony show” that fills up the seats at Carnegie Hall and Lincoln Center won’t stop the sales pitches, but the fallout from the pandemic will stretch far beyond the next few days.
Advertisers, who annually place their bets on which new fall shows will be hits, will be gambling in the dark this year. While some networks are on more solid footing than others with programming plans, others are feeling the sting from the two-month production shutdown, which put the traditional broadcast pilot season on ice and left them without new content to preview.
While nobody in the industry is sure of much these days, one certainty is that advertisers are likely to wait longer than usual to decide where they’re going to spend their money. The upfront market, when the TV networks earmark the majority of their ad inventory for the upcoming year, is widely expected to be see far fewer early ad commitments, multiple industry executives told TheWrap.
“My vision is that the market is going to be elongated. It will not be as intense as years past because it’s going to happen in stages, not all at once,” Jon Steinlauf, chief U.S. advertising sales officer at Discovery, told TheWrap. “And it may wind up going all the way through to the end of the year.” Steinlauf added he could see the market start to move in four to six weeks.
Many advertisers face their own uncertain future as they weather the economic storm from the global health crisis. “Some businesses are able to look forward and have some visibility into where their business is at, and some are really just dealing with trying to get back on solid footing. It’s more unpredictable than we’re used to seeing,” Peter Olsen, executive vice president, ad sales at A+E Networks, said. “The amount of money that’s normally placed in a typical upfront period, we have to assume that’s going to be down. But we don’t necessarily think the full year is going to be an overly negative market.”
But a less robust upfront period will leave more ad slots open for the fall, when the industry hopes to have more certainty. “You’ll see scatter [when ads are sold closer to an airdate] be a bigger part of client plans just to give them the flexibility they want,” he said.
Upfront talks are going to be done under a cloud of uncertainty, especially as it portends to the broadcast networks’ fall schedules. So far, only Fox and CBS are willing to release fall programming plans. CBS even went as far last week as to greenlight three new series, with Fox adding one rookie for midseason on Monday.
The lack of visibility for the networks will certainly make the advertising community more cautious this year.
“There is not a mad rush to begin negotiations,” Gibbs Haljun, Total Investment Lead for GroupM’s Mindshare U.S., said. “Disney has been very vocal on that, (saying), ‘We don’t know what we’re going to do, we’re not going to be in a position to make any sort of announcements, or have any discussions about it until we get into after Memorial Day.'” But he argued that it’s not making clients nervous, given the unprecedented circumstances.
It’s not just entertainment programming that is creating uncertainty. Live sports commands the lion’s share of ad dollars when it comes to broadcast and big cable networks, particularly Disney (with ESPN) and Fox. NBC is without the Olympics this summer: Comcast touted $7 billion in upfront sales last year partially due to early movers on the Tokyo Games — and while those ad commitments will be honored when (if?) the Games open up next summer, it still leaves a gaping hole this year in ad revenues.
Major League Baseball has yet to throw its first pitch, and though the league is hopeful of having some kind of season this year, Fox is not guaranteed to have October baseball. The NFL released its 2020 schedule last week that may have come with a giant asterisk.
“If it is a no-go scenario for the NFL, that creates a different marketplace dynamic,” Haljun said. “The schedule has a lot of flexibility… My gut tells me that the NFL will go forward in some way, shape or form in the fall.”
Over the course of one week in mid-March, nearly every single media company scrapped its in-person presentation plans, wiping a longtime staple of the TV industry off the calendar. Olsen said that for the next four to six weeks there was an “understandable pause,” while both networks and advertisers grappled with a world turned upside down.
But then business resumed, though it was hardly “as usual.”
“We’ve seen in the last week few weeks, using the upfronts as kind of a framework, we’ve kind of re-engaged in those conversations,” he said. But the nature of the talks has shifted somewhat. “Some clients are still in the mood to kind of push innovation and some really just want to kind of go back to basics and just make sure they have a nice, stable plan going forward.”
The overall importance of Upfront Week has waned in recent years, as many networks, especially on cable, have shifted to a year-round programming strategy. Though all the major industry players gather for what amounts to a four-day sales pitch about the state of legacy television, the event has been reduced to a sliver of a much larger pie. If nothing else, the industry will find out just how important it is to get Jimmy Kimmel on stage to roast his own network in front of ad buyers.
“The upfront dialogue is somewhat of an always-on thing now,” says Olsen.