TV Upfront Tea Leaves: Hedging In More Directions Than Ever

The TV upfront process has begun, with talk of big dollar signs come June/July.  But is the economy ready?

Financial markets aren’t exactly steady.  Some strongly believe a U.S. recession is around the corner -- amid other slowing economies around the globe.

We all know the TV upfront is a futures marketplace for many. So analyzing  the TV ad market for late 2016 and for the first half of 2017 is what counts. Increasingly, we have scarcity considerations, factoring in any average commercial rating metric you like.

TV networks have talked big upfront things to come in recent financial earning phone calls.   But this isn’t the 1990s. In those years a “strong” scatter market could typically yield double digit percentage gains. That most likely isn’t going to happen.

Instead Brian Wieser of Pivotal Research Group believes TV markets will see high single-digit pricing increases (versus low single-digit gains a year ago), as well as an increase in overall volume for broadcast and cable networks -- something recent upfronts haven’t benefited from, especially for broadcast networks.



CBS says prospects are good, especially looking at its recent special  events -- the Super Bowl and The Grammys -- “along with the strength we’re seeing in scatter, provide an excellent market indicator as we head into the upfront.”

Specifics, please? In the past Les Moonves, chairman/CEO of CBS Corp., could provide more concrete upfront predictions, like alluding to “double digit increases.” No more. Things are trickier now.

And, yes, blame more time-shifting and new TV-video options, including digital media and Netflix.

In that light, NBC announced it is expanding its digital-content-centric programmatic platform to include linear TV for the upfront.  Data-driven deals, hinged to marketers’ own first-party data, will be top of mind.

Even then, NBC notes this is for “select” advertisers and “select” DSPs (demand-side platforms). And, at the same time, NBC talks up “scale” here. Hmm...

All to say, expect even more complex hedging for this upfront market -- now some three months away -- for both buyers and sellers.

1 comment about "TV Upfront Tea Leaves: Hedging In More Directions Than Ever ".
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  1. Ed Papazian from Media Dynamics Inc, February 25, 2016 at 5:15 p.m.

    NBC's sly and clever "programmatic" ploy has nothing to do with the upcoming primetime upfront. As for the predictions, agency and advertiser sources tell us at this point, that they are figuring on an increase in CPMs of around 6% but they can't even make serious projections about the actual dollar volume. Even the 6% CPM hike is just a guess and is subject to change. One thing is clear, however. The sky is falling predictions about "linear TV's" impending demise and a massive flight of ad dollars to digital, are not even being mentioned by those supposedly in the know in our recent conversations. This doesn't mean that digital has lost out completely and can never stage a comeback, but its ad clutter/ad blocking issues and failure to deal with these quickly and effectively seems to have put something of a damper on the possibility of significant  short term ad revenue gains made by digital at the expense of the TV networks and the major basic cable players.

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