It’s pretty clear we won’t have a normal upfront this year. As Horizon Chief Investment Officer Dave Campanelli recently told MediaPost’s Brand Insider, “I don't think there's literally any chance the upfront happens on that normal May/June timeline.”
It’s pretty clear the large buying agencies don’t have consensus among their clients on what to do. On IPG’s earnings call earlier this week, CEO Michael Roth said it was hard to predict clients’ ad spending plans: “If you want to, call them schizophrenic. One day they cut things dramatically, the next day they feel it's a good time to build brands and get messaging out there.”
I strongly suspect that TV ad spend not committed to the upfront — or being saved by advertisers and dropped to their bottom line — is going into scatter, possibly with plans to change future upfronts forever. “I've heard people talk of placing 4Q into scatter and shifting everything to a calendar upfront,” Campanelli said in the same interview cited above.
Which means TV ad sellers are in a good spot to sit back and wait. Most want more certainty on their fall and winter programming, from live sports to prime time, before they try to do massive deals at wholesale prices. In the meantime, they will get better pricing in scatter, have plenty of inventory to sell with so many more viewers at home sheltering and watching TV — and can do one-by-one deals with individual clients (and their agencies) that choose to break ranks from a group-managed upfront.
As ViacomCBS president and chief advertising officer Jo Ann Ross told Variety earlier this week, “We will be ready whenever they want to come to us.”
This year’s upfront will devolve into three parts:
The first will be smaller upfronts over the summer by some large agencies on behalf of a subset of their clients.
Second will be one-off, client-specific deals done network by network over the course of the calendar year to serve the particular needs of that advertiser.
Third will be a massive shift of spending from upfront into scatter, with the majority of all TV advertisers opting to spend most of their money closer in time to their campaigns launches when they have more certainty on consumer attitudes and inclinations, their own business capabilities and the inventory they are buying.
Given where we are today, as well as the recent changeovers in leadership at a number of large buying shops, I think the above scenario has a very good chance to play out. If it does, here are three big implications for the market:
Upfronts will never be the same again. If the upfront breaks into parts, all the king’s horses and all the king’s men won’t be able to put it back together the same way again. Too many market participants, even if only a minority of them, will find that a broken upfront is better for their businesses.
Perpetual scatter will become the new center of the TV ad market. It will be years before TV networks have as much predictability about their future programming and ratings as they had in years past, if they ever have it again.
Mid-year annual upfronts won’t make as much sense anymore. And most of the sellers will learn that they can make more money in scatter. And, as they invest in more technology to drive their predictive analytics, yield management and automation, they will then realize they'll have more certainty and control in a more just-in-time selling world.
TV and digital ad spend will be much more closely aligned. Virtually no appreciable pure digital ad spend is committed in big upfronts like TV. The more that TV ad spend shifts to just-in-time, the more it can be coordinated with search, social, digital video and OTT campaigns. This will make video ad buying more truly holistic and make it much easier for clients, agencies and media owners to plan, buy, measure and optimize all their advertising.
What do you think? Will scatter be the new center of the TV ad world?