Last year only media agency GroupM took it upon itself to change to the broader C7. This year, it seems that only one network executive made a slight reference to the issue: CBS Corp. CEO Les Moonves, who simply said more C7 deals would occur.
Now, media agency executives say moving to C7 is basically a one-time negotiation setting future upfront costs -- a chance for advertisers to adjust their price “bases,” which are existing year-ago average [cost per thousands] CPMs from which subsequent rate increases/decreases are adjusted.
Having your base of a $40 prime-time CPM for the 18-49 demographic and perhaps witnessing a 3% hike on your favorite network would now bump up that marketer to $41.20.
Other marketers in a particular upfront market could get the same 3% hike. But some may have a base of $45; others, like a high-spending consumer product company, may be at $39.
Year-ago estimates had TV networks believing they could extract from 2% to 5% more in upfront advertising dollars should they get virtually all upfront deals guaranteed on C7.
That 5% number is something TV networks ad executives might be eyeing again this year -- which, interestingly, is about the percentage national TV networks collectively lost in upfront prime-time dollars versus 2013 last year. Estimates are they could lose another 5% this time around.
TV networks will be shooting for improvement; but advertisers -- seemingly in the driver’s seat -- will want some compensation.