Buyers Predict End To Upfront 'Scarcity:' Cite 'Overwhelming' Supply, Shift To Audience-Buying


The rapid expansion of supply, data and the ability to target audiences directly, as opposed to the programming they watch, is beginning to change the way Madison Avenue participates in the upfront media-buying marketplace, according to top media executives of some of the industry's biggest agencies.

“The issue of scarcity, which is why the upfronts have been so successful, will fundamentally change,” Barry Lowenthal, president of MDC's The Media Kitchen, predicted during a panel at MediaPost's annual Outfront Conference in New York Wednesday.

The panel, which focused on how changes manifesting now could impact the way advertisers and agencies buy upfront five years from now, painted a portrait of an ever-increasing supply of video programming content that would reduce the need for media buyers to hedge inventory for fear of being closed out of a marketplace for all but the most premium -- particularly live event programming -- the executives predicted.

Lowenthal was among the execs who said he was personally “overwhelmed” by the volume of content being trotted out at the digital Newfronts during the past week, noting: “I have no idea how consumers will make sense of it. I can’t make sense of it. One might think the only way to make sense of this is to put it all in a programmatic world, but I can't imagine it happening immediately.”

That's exactly what other executives -- especially Kristi Argyilan, president-North America at Interpublic's Mediabrands’ Magna Global unit -- said her agency is putting in place now. She said Magna has already built the data framework for processing much of its buying programmatically, and is now focused on encouraging suppliers to follow in that direction, where it makes sense for them.

“There is absolutely some primo content that we want to make sure we snatch, or even develop with our partners,” she said, adding, however, that it is likely to be a relatively small share relative to the amount of inventory agencies have historically purchased upfront in the past.

“At that point, we don’t need an upfront. [Or] the upfront shrinks dramatically,” she said, adding: “Everything else has the potential to be executed more through an automated platform and can be done absolutely through audience data. And that’s what we’re pushing.”

“Our world is hopefully a little bit of what the world will become,” said Brian Gleason, managing director-North America at GroupM trading desk Xaxis, adding that it's unlikely that buyers will be forced to procure inventory during a seasonal marketplace the way they do now in the upfront, and that markets will move increasingly real-time.

Perhaps the biggest shift underscored by the panelists was the one underscored by Adam Kasper, chief media officer at Havas Media.

“I think we are going to see a move away from a programming upfront to an audience upfront,” he suggested, noting that enhancements in the kind of audience data advertisers and agencies are developing will enable them to target all forms of programming based on the audiences they want to reach instead of using the content as a proxy for reaching them.

“This will evolve and what we will see is individual audiences that are more valuable to advertisers and I think we will see some of the bigger publishers start to realize that,” Kasper explained, adding: “I think it starts to migrate towards where you have upfronts based on a completely different set of parameters and standards than what we are doing right now -- more around the audience than the programming.”

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6 comments about "Buyers Predict End To Upfront 'Scarcity:' Cite 'Overwhelming' Supply, Shift To Audience-Buying".
  1. Bill Koenigsberg from Horizon Media , May 8, 2014 at 11:08 a.m.
    With all due respect to Barry Lowenthal the upfront is not going away soon. Marketers want premium content the top 20 percent at that will always have a demand whether it be broadcast, cable , or OLV. Still is a first mover advantage . And yes we will move away from programs to the value of specific audiences...already happening. Now if you want to talk about the upfront model that's a different discussion.
  2. Dave Morgan from Simulmedia , May 8, 2014 at 12:18 p.m.
    As long as TV continues to be the dominant and predictable driver of consumer sales for highly-competitive categories like retail, quick service restaurants, insurance, automotive, movies and packaged goods, demand for TV media will continue to outstrip supply, and the industry's futures market - the Upfront - will continue to exist. There will still be an Upfront in 2020.
  3. Christopher Black from Sears Holdings Co. , May 8, 2014 at 3:43 p.m.
    We are making a large scale shift to audience buying. This after an extensive 12 month long series of pilot programs and tests. The "Upfront" will exist in that there will be a marketplace for the most scarce and desired inventory, but - unlike today - it will be minority of our investment.
  4. Kamran Asghar from Crossmedia , May 8, 2014 at 4:13 p.m.
    Good discussion! And I love Christopher's approach. Ultimately clients will need to better understand the true effect of what parts of their TV inventory work and which do not. Only then, will the advertiser support the case for a reduced upfront investment. Wouldn't it be great if you knew that scatter TV or DRTV or online video was as or more effective as your upfront inventory? Clients should be happy to pay a premium if it WORKS. The only way to have more confidence to walk away from the upfront is to embrace advanced analytics as part of the buying process. In the not too distant future, programmatic will simply be the means to transact, just as it is now. What’s great about the promise of programmatic is using 1st party data to understand effectiveness. Not just buying efficiencies. I can't wait until we all "book" our inventory on the TV exchanges and then turn around and have "upfront" content conversations with the networks (and digital video platforms) based on shared objectives and ideas. Let’s rock!
  5. Jim Meskauskas from Media Darwin, Inc. , May 12, 2014 at 9:57 a.m.
    There is more TV inventory now than there ever has been. But by and large, there isn't more "good" TV inventory now than there ever has been. While an audience-focused buying strategy is desirable, it has ALWAYS been desirable. That's why advertisers want to buy good content. Because it serves as a surrogate for those audiences. When you can find those audiences in spite of the content around which they aggregate, terrific. But there isn't anyone who can show that content affinity with target or product isn't superior to every other kind of play. Audience buying should be the overarching goal, but content affinity or associations will always be primary, thereby necessitating some kind of marketplace to deal with scarcity of desirable content. "Overwhelming supply" is relative only to the gross universe of supply -- it's like saying there is an overwhelming supply of water, without distinguishing between potable water and all water. All poodles are dogs; but not all dogs are poodles, after all.
  6. Leonard Zachary from EquityStep , May 12, 2014 at 12:11 p.m.
    Convergence of TV and digital metrics will be a driver putting more weight on audience buying than the upfront buying. The more digital devices/ boxes out there adopted by viewers for their TVs such as Roku, Apple TV, Chromecast, the more emphasis for homogenized TV/digital metrics. Buyers already know this. Cable MSOs like Comcast already know this. Broadcast TV networks will only know this when its a overbearing necessity which is going to be sooner than later.