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.