Commentary

Will Digital Advertisers Move Into The TV Space At The Upfront?

While TV networks work in messages for their upfront presentations about brand safety and viewability, it seems like a good time to take a deeper look at the competition.

The Interactive Advertising Bureau says digital video hit a record $11.9 billion in 2017 -- a massive 33% year-over-year increase from $8.9 billion in 2016. It is part of a total $88 billion spent on U.S. digital ad media last year.

All TV advertising revenue is at around $70 billion per year, with national TV networks representing just under $50 million; upfront is an estimated $20 million of that national TV total.

So looking at the big picture, does any of this represent opportunity?

Traditional TV networks focus more on new audience segments, attribution of specific business outcomes — tying ad exposure to website visits, floor traffic and actual sales. It is a slow but gradual effort to play in digital media’s game.

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Is this enough for those small to medium-sized digital media advertisers to move into the TV space?

Over the years, TV networks have struggled to find big brand advertisers that can lift their budgets for just traditional TV networks. Compounding this, traditional TV advertising categories have been wanting in recent years.

A few years ago, Draft Kings and FanDuel -- sports fantasy game marketers -- were the last real boosts for traditional TV, which faded. Prior to this, we witnessed a few gains from some Internet consumer-based marketers and new pharma products before that.

In 2017, the upfront advertising market gained 6% to $19.7 billion, according to Media Dynamics, a media consultancy. In 2016, TV’s upfront ad-selling season witnessed a 4.6% revenue hike to $18.6 billion.

Networks say much of this was due to traditional TV advertisers “coming back” to TV from digital, given brand-safety concerns.

There should be a significant change this year. TV’s mantra should not have anything to do with coming back -- it should be more about going forward.

1 comment about "Will Digital Advertisers Move Into The TV Space At The Upfront?".
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  1. Ed Papazian from Media Dynamics Inc, May 14, 2018 at 3:54 p.m.

    Wayne, I agree with you that the next few upfronts will be more about going forward but we should note that in addition to the $20 billion spent in primetime many other dollars are allocated to other dayparts and sports in a similar fashion. Which is good for the sellers but a possible problem for those who wish to use finer, brand-specific targeting as opposed to "bulk" corporate time purchases.

    Even though the networks and some cable players are dabbling with so-called "advanced" methods of targeting for selected advertisers in single seller deals, nothing much will come of this until advertisers allow their brands more flexibility so they can buy time according to their needs and until the sellers allow rival buyers to compete for "advanced TV" ad revenues.

    One solution which we have proposed is a two-upfront approach. The first one would be just as it now is with large corporate, low CPM tonnage buys utilizing seller-orchestrated "package" deals. The second would be a selective upfront, with each brand buying its own time using targeting that is appropriate to its case and, of course, probably paying higher CPMs as a trade-off for this priviledge. Finally, we would have the scatter market as a more flexible and opportunistic quarterly option for corporate or individual brand buys. This way, those who care mainly about low CPM audience tonnage get what they want while those who prefer more focused targeting can do that too. Indeed, many brands may go both ways, securing a low CPM base of GRP tonnage visa corporate buys, then adding better targeted buys to place more audience  "weight" where they feel they need it.

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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.