Is the upfront market still a futures market? It depends whose future you’re looking at.
In the old days of TV buying, there were many more marketers and their media agency executives working deals for key individual programs -- all with the aim of getting an undiscovered, perhaps quiet, little show cheap, before it became a huge success.
Today that process -- while still important -- is less important for many marketers. New ROI measures factor in more about consumers, and less about specific shows.
Did you decide to buy a soapy ABC drama about some housewives cheap? A show rejected by Lifetime and other networks? That show, "Desperate Housewives," turned out to be an almost instant hit. You might have also bought ABC's other out-of-nowhere, mysterious drama that hit the ground quickly -- "Lost."
Maybe a decade before that, NBC wanted to sell you on a comedy about some friends hanging around each other at something called Central Perk. Sure, it was funny. But what kind of ratings would it get? Turns out if you bought “Friends” early on -- and for the right price -- you did well. And before this, there was perhaps "Cheers," "ER," maybe "Seinfeld."
Those kind of "future" bets are still important to media agencies this time of year. But with continued fragmentation on the networks, it not only gets harder to find them, but perhaps less important.
While media agencies work hard to get the "best" prices, according to many executives, sometimes there isn't much difference. Pricey $30-plus CPMs among key demographics are everywhere.
Maybe buyers need to lower their sights. No one thought ABC's "Once Upon a Time" was going anywhere; perhaps the same was true for AMC's "The Walking Dead." So you put it on your clients’ media schedule. You did well for the price.
With fragmentation, the trouble is that you need to find many more of these to gain impact. That means getting lots of impressions from other video sources, some growing and some not, with cable networks and syndication perhaps being the key.
Is digital shifting ad dollars from TV? Not so much in the upfront. Where's the scale? Where's big original content or, for that matter. large viewership of digital reruns of network shows?
The entire TV advertising market is some $80 billion a year, with the Internet around half that -- $37 billion. But a lot of the digital growth still comes at the expense of print media. The key for TV marketers, if anything, is where the entire digital video market -- currently around $2.5 billion -- is going. Yes, it is growing quickly. But what are you really buying?
This upfront season’s big bet? How much will marketers buy a futures option -- one year starting in September -- on this small sliver of the online advertising business?