Commentary
Upfront Deals May Not Be Sealed Until Q4
- by Wayne Friedman , Staff Writer, August 31, 2020
Is that the timeline for when the majority of TV upfront advertising deals will get done?
Until now, TV upfront activity has moved at a snail’s pace, with all the obvious question marks: When, what price, what volume, and at what increases in cost per thousand (CPM) viewers?
Right now, TV media buyers aren’t interested in any CPM increases. (Of course, they say that every year). But more specifically, they believe the market should offer a 5% decline in CPMs.
For their part, TV networks are hoping for flat pricing, according to sources. That said, with even more viewership erosion, lower overall revenue advertising volume would be the result. Whoa.
Even then -- given the still-iffy marketplace going forward, one where a vaccine deployed for all U.S. citizens could arrive by spring 2021 at the earliest -- it means massive hesitance on the part of consumers to buy stuff. Or for business owners to hire back more workers.
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So if you are planning a multimillion-dollar upfront buy, what should you do?
Lots of focus remains on the near-term, month-to-month buying of the scatter market, where TV network media sales executives recently have termed that market “strong.”
The downside, of course, is that scatter unit pricing continues to be historically higher versus ad deals made during the upfront selling period.
SQAD says that during the first three months of this year, average scatter prime-time pricing for ABC, CBS and NBC was $144,584 per 30-second unit, with pricing on deals made during the upfront, $83,171.
In April, it was $108,952 (scatter); $84,734 (upfront).
True upfront market news will come in dribs and drabs -- with some networks talking about completion of their TV advertising deals, and some not talking at all.
At present, budgets are being registered. But when all it well and done, I’m thinking upfront deals will come with a nice bow attached. Surprise Thanksgiving or Christmas gift?
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Wayne, this year's upfront is totally disrupted by the pandemic and its impact on ad spending as well as delays for new episode production for holdover as well as new shows. So you are right in speculating that what are termed "upfront" deals for primetime fare will, no doubt, spill over into next year. What seems to be happening---albeit with exceptions---is a temporary merging of upfront and scatter buys---based on how extended the buys are intended to be. If you are afraid to gamble, you go quarter by quarter in scatter and pay 30-40% higher CPMs; If you go beyond a quarterly time frame, but not necessarily for 12 months in advance---the latter being very difficult without knowing what the programming will be---you try for a lower CPM but the networks may or may not give in. The result is a mess, complicated by Nielsen's attempted gift to the sellers of a 2% hike in "audience" based on assumed but not measured OOH commercial "viewing". I expect that the much awaited arrival of a working vaccine some time next year will resolve most of these difficulties and things wil revert to "normal".