In an advertising market update released this morning,
media auditing firm Cortex Media projects the 2023 advertising marketplace likely will experience a "slowcession," a term it made up characterizing the economy as "coming to a standstill, but never
going in reverse." In terms of media-buying implications, it is projecting the 2023-24 upfront advertising marketplace will be most impacted, declining 7% to 8% over 2022-23 volume.
"While
there is no major activity on upfronts yet, the media inflation outlook is a lot lower than in previous years and is expected to be at 7%-8%. However, it will likely rise if the economy shows
signs of improvement soon," the Cortex market update reads, adding that "fluidity deals," "cancellation windows," and ratings will be key factors in this year's negotiations.
"Fluidity deals
have allowed the networks to raise the cost of formerly lower-priced non-linear impressions to achieve pricing parity with linear impressions," the report notes, adding, "This year’s conditions
for fluidity deals will depend on who has the upper hand (buyers or sellers) given the timing of negotiations. Additional oversight of fluidity deals will be needed as the reallocation of impressions
between linear and streaming will continue to increase."
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The report also alludes to "noise" about potential changes in historic cancellation option windows for upfront advertising buys, noting,
"While linear flexibility remains the same as in previous years with the standard cancelation options, streaming deals generally have just a two-week cancellation period based on current IAB
Guidelines. That may now be changing. Although linear and streaming were bundled together in last year’s upfronts, buyers were clever by committing more money to streaming with its greater
flexibility on cancelations."
The report anticipates that despite the continuing emergence of "alternative" advertising currencies, most upfront TV advertising deals are expected to be based
on Nielsen's existing panel-based ratings estimates.
"While advertisers want the benefit of cross-media measurement and a single view of who’s watching, the marketplace is not ready for
a change of currency yet, nor does it have the confidence in the next Nielsen offering currently. There are still worries about the continuity of results used for tracking, as well as the
duplication of impressions across screens," the report explains.
The report projects better news for the digital advertising marketplace this year, estimating it will expand as much as 7% over
2022 levels, though it notes that the first quarter was "off to a slow starts as digital publishers reported they are tracking 10% to 25% behind revenue forecasts" for the quarter.
Cortex's
market update jibes with a report released by another media auditor -- ECI Media
Management -- earlier this week, projecting a deceleration of media advertising cost inflation, especially for TV.