Upfront TV prime-time advertising spending will sink 3.6% to $18.64 billion -- the first time the market will decline since the COVID-19 pandemic disrupted the upfront market in the summer of 2020, according to Insider Intelligence/eMarketer estimates.
This will come due to “shrinking ad budgets and an abundance of options [that will] spark a buyer’s market,” according to the report. “This decline is being driven by economic instability, declining viewership ratings, the trend of cord-cutting, price-reduction pressures, a shift in audience from traditional TV to CTV, and a transition from conventional to digital media.”
Traditional upfront TV advertising deal-making is where advertisers agree to buy inventory on TV networks for an entire TV season before the season starts in the fall -- usually amounting to 60% to 70% of TV networks' inventory. A full TV season runs from late September through August of the following year.
Following the start of the pandemic in March 2020, the summer's upfront market witnessed a 6.6% decline to $17.91 billion for the 2020-2021 TV season.
The report expects the upfront to recover somewhat next year for the 2024-2025 TV season, inching up 0.8% to $18.79 billion.
These results include TV ad spending per broadcast year for broadcast and cable TV networks as well a national syndication -- driven by TV network prime-time upfront presentations that occurred last month.
But it says when adding NewFront-related deal-making -- from connected TV business -- there will continue to be sharp gains, up 29% to $8.66 billion in 2023 (and 36% next year to $11.75 billion) from upfront TV and NewFront advertisers' committed spending in advance.
Looking at the broader overall digital video segment -- where CTV has a 70% share -- it is projected to see a 28% hike to $12.49 billion in digital video ad spending committed in advance for a particular calendar year.
Last year -- for the 2022-2023 TV season -- Media Dynamics says there was a 5.8% gain in revenue to $20.1 billion in upfront prime-time ad spending.
Insider Intelligence/eMarketer estimated there was a 1.5% improvement for that season to $19.33 billion.