National TV revenue could drop to around $13 billion from a more typical $20 billion upfront marketplace, collectively pulled in from broadcast and cable networks and national syndication programs.
So if there is some $7 billion up for grabs, where is it going? Perhaps a demand side platform (DSP), midsize and fringe cable networks, and/or premium streaming platforms.
In its earnings phone call last week, Jeff Green, CEO of The Trade Desk, in an overall picture of the marketplace, said: “We are winning incremental spend that would have historically been committed in the upfronts ... CTV [connected TV viewing] is getting what linear is losing from the expectedly weak upfronts.”
Spending has been upended by the pandemic.
“We saw a sharp deceleration in spend during the second half of March ... a negative mid-teens year-over-year decline [in the last week],” says Blake Grayson, CFO of Trade Desk. “In early April, the year-over-year decline in spend continued to increase.”
Trade Desk touts itself as the largest aggregator of CTV ad impressions, and going forward, it is, of course, optimistic.
The equation isn’t that simple. The shift to connected TV sales -- in the past and future -- could come to benefit legacy TV media companies through third-party demand-side platforms, like The Trade Desk. Think Disney’s longtime streamer Hulu or Comcast’s forthcoming Peacock, big premium ad-supported video platforms.
Other speculate possible gainers from a lower upfront could be legacy cable networks -- especially those that depend more heavily on the scatter markets. Additionally, it could help cable networks that work on many calendar year upfront deals for marketers.
Many digital-first marketers with a history in near real-time digital media deals yielding key business outcome metrics could place more “just in time” scatter buying on legacy TV, especially with rising return on media investment data metrics from those networks.
Overall traditional TV networks sales executives see the marketplace as totally fragmented -- perhaps a bifurcated one where upfront deals are made for fall 2020 and others start in January 2021.
Mark Marshall, president of advertising partnerships and clients for NBCUniversal, tells TV Watch: “We're in contact with our client and agency partners on a daily basis, and flexibility is definitely a focus. But flexibility means something different to each, so we're working to find a path toward it on an individualized basis.
Flexibility is a good idea. But growing competitors will have that flexible, as well.
Wayne, the most likely answer to your question is that most of that primetime $7 billion---though probably not all of it---will go to "linear TV" scatter buys over the next three quarters. The same is probably true of the reduced portion of the "other upfront"---non-prime spending---much---though not all---will go to "linear TV" sellers in scatter buys.
My guess is that the one-third drop in upfront dollars is pretty much aligned with the WFA research reported today in MediaPost saying 36% cuts in advertising budgets. It's just a hunch.