Picking Up The Scattered Pieces After Upfronts

In the 2018-2019 TV upfront season, the key broadcast networks once again took in more revenue while ratings continued to erode. That revenue growth was in part due to CW expanding its schedule to include Sunday nights, with other networks selling more inventory, and charging double-digit increases.

If the persistent trend of ratings erosion continues, inventory will be needed for under-delivery make-goods. This will cause a scarcity of remaining inventory, resulting in significant increases in pricing for retailers, pharma, studios and other marketers buying in the scatter marketplace.

Traditionally advertisers who spend in scatter are those who could not enter the upfront for myriad reasons: new product launches, pending creative or budget approvals.

But could there be new reasons why this is the case? That’s not to say that the upfront was not strong this year — it was — but are clients starting to consider holding back dollars to be more flexible in the evolving media landscape?



Spending in scatter provides flexibility with placement, but that comes with a cost. Outside of recessionary periods, the scatter marketplace is historically more expensive than the upfront period. As advertisers try to be more flexible with dollars but also to drive efficiencies, how do they hold back in the upfront, knowing that increases in scatter are imminent?

How do clients create efficiencies with media inflation on the rise and continued GRP erosion, which actually results in the unpredictable nature of the scatter landscape? These marketers are considering other ways to reach consumers  — OTT and CTV, digital platforms, technology advancements -- which are all driving how media is being bought, sold, seen and heard.

One way is to leverage local television inventory to expand the available national supply. In this way, marketers can supplement national budgets with local inventory and garner equitable coverage to achieve national reach and guarantees from Nielsen, usually more efficiently.

In the first half of 2018, cable news networks’ scatter increases are well into the double digits for many months  — as high as +31% on a unit basis from January to June, as reported by SQAD. This is creating a need for advertisers to look for other options to reach their audiences with manageable costs.
The key networks still provide needed reach, but they and the national cable networks are not the only game in town. All of us can agree that rising costs and shrinking ratings are not the desired state for marketers. Finding efficient, effective ways to reach consumers is the name of the game.

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