Friday, June 19, 2020

The UpFront market for television ads: is it time to change its timing?

The coronavirus pandemic is an opportunity for advertisers and television networks to renegotiate an odd feature of their market for advertisements.  As I understand it, advertisers wishing to purchase blocks of advertising for Fall television series have to do so early, in the Spring, in what is called the upfront market.  This runs so early that some of the shows are still in the early planning stage, so that advertisers have some descriptions of plot lines and target demographics, but they are buying ads in shows that no one has seen yet.

The WSJ has the story:

Big Advertisers Call for a Seasonal Time-Shift in TV’s Upfront Marketplace
Procter & Gamble, Bank of America and others want to move upfront negotiations for ads in the multibillion TV market to the fall from the spring.  By Sahil Patel

"Big-brand advertisers and an industry trade group are calling on the television networks to delay their annual upfront ad marketplace to later in the year—a big shift in the way TV programmers and advertisers have done business for decades.

"The push is driven in part by the havoc the coronavirus has caused in the television business, from the shutdown of production to the big question mark over when sports will return. Both are critical to advertisers: they say there is a lack of visibility into what they would be buying. Ad budgets also are in flux as many advertisers have pared spending during the recent downturn. Many are struggling to figure out what next year’s budgets will look like.
"The TV industry has operated on a broadcasting and advertising calendar that starts in September since 1962, when ABC decided to debut all its programs after Labor Day. Normally, TV networks pitch their new programming at glitzy New York City events in the spring and negotiate ad deals for the fall season soon after.

This year, however, the live upfront events were canceled due to the virus, and executives now expect deal-making will drag out through the year.
"The trade group said there is still value in negotiating ad deals upfront—they would just prefer to shift the timeframe. Upfront deals are beneficial to advertisers as they are able to get lower prices, especially with a limited supply of inventory, and maintain protections like make-goods—which aren’t available to advertisers buying in the “scatter” market, when ads are purchased closer to the time they air."

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