Although major TV national brand advertisers have made efforts for years to shift the timing of the upfront market to calendar-year deals, COVID-19 disruption has given this added momentum.
“With uncertainty around the economy and public health like we’ve never seen, we strongly believe that a responsible course of action is for the upfront marketplace to occur at a later date,” says an ANA Media Advisory Board.
The board is comprised of 13 members, including Nestle USA, Mastercard, Procter & Gamble, Anheuser-Busch, Ford Motor, Bank of America, Unilever, McDonalds, and others.
Current full-season advertising buying for TV typically begins in the June-July period for season-long media schedules running from September and through August of the following year.
Due to the COVID-19 pandemic, TV network ad executives have already projected that a sizable piece of the marketplace looks to be moved to media schedules starting in January as marketers face uncertainty about their media-buying plans.
Whereas 70% of major TV advertiser budgets are typically used to buy national TV inventory in the May-through-July period for the upcoming TV season that runs from September to August, some are now estimating that this could sink drastically -- to 30%, according to media executives.
Another 30% could be scheduled as calendar-year deals, with the remaining inventory bought as fourth-quarter “scatter” deals.
Last year, Media Dynamics estimated combined broadcast and cable networks' upfront TV ad deal-making saw a 5.2% increase to just over $20.7 billion.
And even apart from COVID-19, the ANA group says overall changes in the timing of upfront marketing are necessary, and will “reflect and improve business planning, elevate marketer decision-making, and align television buying with most marketers’ fiscal years. This is an immediate priority.”
The ANA also recommends that the market “include greater visibility to the marketplace, ratings estimates rooted in more realistic research, increased financial flexibility throughout the year, and improved ability to measure business results with our investments.”
It adds that “sellers largely control the information. Sellers require advertisers — and the agencies on their behalf — to “register” budgets for the upfront. This gives sellers the market intelligence to know how much money can potentially be invested in the upfront and set prices accordingly.”
Historically, the timing of the TV season -- and the upfront ad market -- began decades ago to coincide with major automotive marketing decisions, when new models of cars were introduced to be sold in September.
The move to calendar-year deals has been a slow-moving process. In recent years, a number of major national brand advertisers have shifted in part to calendar-year schedules to reflect the timing of their marketing efforts for products and services.