Commentary

How Does Audience Buying Fit Into The Next Upfront?

Against the pull of traditional TV advertiser systems, habits and price biases, TV advertising’s upfront market for the 2019-2020 season -- some $22 billion -- hopes to move some business to audience-based guaranteed buys from age/gender-based deals.

How much? Jay Prasad, chief strategy officer, VideoAmp, the TV/digital advertising technology company, says maybe around $3 billion worth next year -- around 10% to 15% of the market.

“It’s admittedly aggressive -- but not out of reach when you look at two factors. First, is the volume of estimates from companies like NBCU, which have already invested in making audience-based, cross-screen buys a core component of their upfront strategies,” he says.

Second, he points to AT&T’s new advanced advertising unit Xandr, which focuses on audience-based buying and addressable TV advertising.

“[There] is the push to create new marketplaces like [AT&T’s] Xandr, where everything available is addressable, cross-screen, and measurable. If the inventory is available, it goes across screens, allowing buyers to more intelligently plan and measure their audiences. Then that’s how they’ll spend their upfront budgets,” Prasad adds.

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For many analysts, the growth audience-based buying assumes more companies jump in -- especially around the Open AP network consortium initiative that Viacom, Fox, Turner, NBCUniversal and Univision have supported. Those companies say they represent about 50% of all national TV advertising inventory.

Much of Open AP's efforts have been to identify common-core audience groups for TV marketers going forward -- something that should move the market. Some media agency estimates: 10% to 15% of advertisers’ budgets should go into new audience targeting.

But what about more specific deal point guarantees -- like specific sales outcomes?

“The upfront is still about brand marketing,” says Prasad, speaking to TV Watch. “It should be about efficient reach against a strategic audience; you could have a secondary currency about age and gender.” In addition, a third currency could be about location, sales, social media engagement or another outcome.

Why be this aggressive for traditional media this year? Because big digital media players are ready to swoop in and really knock over some traditional media practices.

“If the market and traditional media doesn’t move this fast, what do you think about Amazon? Do you think they are going to sell age and gender?” he asks.

He says if Amazon buys up a big sports TV network/franchise, it will connect viewers’ Amazon accounts to TV commercials. That is a good enough reason to at least take one strong step.

No doubt legacy TV upfront base price deals -- and a host of other traditional media factors -- will remain major obstacles. But a small change may signal bigger ones.

1 comment about "How Does Audience Buying Fit Into The Next Upfront?".
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  1. Ed Papazian from Media Dynamics Inc, December 18, 2018 at 9:58 a.m.

    By "audience based" he means those brand by brand buys that are negotiated with individual network sellers using "big data" set usage ratings to index each show as to its supposed  marketing value for each advertiser. These findings are then applied to conventional Nielsen ratings---usually by sex and age----to form the "currency" for each purchase and its audience guarantees.

    The problem with these "advancements" is the fact that, so far, these have all been single seller deals without the ability of the buyer to evaluate the offerings of competing sellers---hardly a positive situation as the seller is in complete control, not the buyer. Also, the use of "big data" set usage ratings to determine the "value" of the audience is heavily biased in favor of the sellers and counter to that of the buyers as it creates a misleadingly positive profile for many shows whose actual viewers are not nearly as attractive as the indices paint them. Finally, the break on this type of selling is the simple fact that most upfront buys are---and will remain---corporate, not individual brand negotiations. How do you determine the marketing value of any audience when you are lumping all sorts of product groups and targeting needs together?There's no such thing as "the average brand". Until this changes  movement in this direction will remain limited.

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