Sellers Lay Out Flexible Approaches to Upfronts

The upfront picture has gotten a bit clearer as programmers lay out plans to present their programming and ad products for media buyers and clients.

When those clients will decide to negotiate and how much they will buy remains uncertain in an economy dominated by the COVID-19 pandemic and a helter-skelter approach to reopening the country.

On earnings calls, media companies talked about the impact the late-March shutdown had on first-quarter profit and revenue. In some cases, those companies spelled out expectations for the second quarter, when the impact on ad sales is expected to be most severe.

AMC Networks said it expected revenue to be down 30% in the second quarter and Fox forecast a 25% to 30% decline overall, with ad sales at its stations down 50%.

By and large, most companies foresaw the business climate and the ad market improving by the third quarter.

Ready Whenever

At this point, we know there will be a significant impact on ad sales in Q2, but based on what were seeing today, we believe there will be an improvement in advertising in the third and fourth quarters, assuming businesses begin to reopen at scale, ViacomCBS CEO Bob Bakish said on the company's earnings call. In terms of the upfront, we expect it to be later and longer than normal, but were ready whenever our clients are and deals will get done.

ViacomCBS CEO Bob Bakish said on the company's earnings call that the upfront should be later and longer than in typical years.

Matt Winkelmeyer/Getty Images for Vanity Fair

ViacomCBS has invited more than 5,000 agency and marketing executives to a virtual upfront presentation that will stretch over May 18 and May 19. It replaces CBS's in-person upfront, which has packed Carnegie Hall for years.

Other programmers took different approaches to the upfront.

NBCUniversal on May 11 is hosting what it calls a One Industry Update, described as a state of the marketplace conversation but which NBCU insists is not an upfront.

Disney Ad Sales said it would be holding seven presentations during the weeks of May 25 and June 1, one for each of the six big media agency holding companies and one for clients that deal directly with The Walt Disney Co. or work through smaller agencies.

The presentations will be tailored to each of the agencies, with talent from Disney programming acknowledging the buyers and clients in the room.

I think the key this year is going to be flexibility in every sense of the word, Disney Ad Sales president Rita Ferro said of the upfront market.

In terms of timing, Ferro noted that some companies are doing very well, and will want to move aggressively. We need to be able to do that now and move quickly, she said. Other companies will need a little bit more time to figure out what the back half of the year looks like for them. We'll be ready whenever they are, she said. Some will want to do calendar deals that run from January through December, instead of the broadcast year, which starts with the fourth quarter.

If that's what works for them, we'll be available to do that, Ferro said. We just need to have that open-mindedness and flexibility.

On Fox's earning's call, CEO Lachlan Murdoch said: I think marketers are starting to look forward into the first quarter of the next fiscal year and they are beginning to think about how they get their products and their brands in front of consumers again. It's early days, but we're just beginning to see that positive shift.

The upfront remains hard to predict, Murdoch said. We don't see a virtual, singular upfront as the right thing to do today because all of our clients are affected by COVID-19 in different ways. And they will emerge from COVID-19 impacted in different ways.

Some executives were unconcerned about the timing of the upfront.

Unconcerned by Shifts

In a more normal year, we have advertisers shift from upfront to scatter, some from scatter to upfront, some from broadcast to calendar, some from calendar to broadcast, Joe Hogan, executive VP, sales and marketing, at WarnerMedia, said. So those are natural shifts that we're used to dealing with anyway. We're here for whatever pathway works best for the customer.

WarnerMedia has been sending newsletters and videos to clients and buyers every week as a replacement for its big upfront presentation.

Peter Olsen, executive VP for ad sales at A+E Networks, said recent conversations with clients have started to sound like typical pre-upfront conversations. There's been that hint of optimism and normalcy returning to the dialogue, he said.

Some clients want to go down the path of innovation and targeting and guaranteed outcomes. Some just want to go back and get their spots on the air, Olsen said. We're taking a flexible approach and really listening to what their needs are, timing-wise. Whether it's this summer or this fall or in between, we're prepared for all those scenarios.

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