Why This Matters The bulk of TV's national ad inventory for next season gets sold during the upfront, setting the tone for the industry's financial outlook.
Related: Lifestyle Shows on a Hot Streak With Sponsors
As upfront season begins, television advertising sales executives are bullish, pointing to a strong economy and a rising stock market.
In the annual commercial-buying bazaar last year, advertisers committed about $18 billion to TV, and paid double-digit price increases to many of the top networks.
But media buyers aren't expecting this year's market to be a rerun of last year with respect to pricing. Scatter dollars swamped the market in 2016, allowing some networks to garner double-digit increases in ad rates on a cost-per-thousand viewer basis.
Before negotiations start, the industry will have to work out several key issues, including metrics for measuring viewing that increasingly occurs on mobile and on devices hooked up to over-the-top streaming sources.
Better Yardsticks Needed
Buyers and sellers are looking for better ways to compare the impact and effectiveness of TV commercial impressions and digital ad impressions.
Data is also a big buzzword, and there are questions about how big a role it will play in this year's market.
This year's upfront kicked off on March 2 as Viacom's Nickelodeon hosted media buyers in New York.
If kids are a leading indicator, Viacom's head of sales, Sean Moran, predicted a strong advertising market.
With deregulation coming out of Washington, you're seeing that increase a lot of corporate spending, Moran said. You're seeing a lot of analyst reports that are showing great earnings. You see the stock market at an all-time high with no signs of slowing down. And you look at the major indicators for different categories, like telco and transportation and auto and others. Those are all moving in the right place.
Those factors will also help the general ad market.
Bruce Lefkowitz, executive VP of ad sales for Fox Networks Group, said he expects spending to rise in this year's market as sponsors shift some ad dollars they had been pouring into digital advertising back into TV.
Last year, there was a stealthy reset of TV's value, with a few market leaders leading the way, Lefkowitz said. I think this year, the reset will be broader and I think you're going to see more money moving back to television.
According to Pivotal Research Group senior analyst Brian Wieser, TV ad revenue was up 6.5% last year to $69 billion, including political and Olympics-related activity. He said spending should flatten in 2017, with TV's share of total ad spending slipping to 32% from 33% in 2016.
It's early, but Wieser predicted volume in the upfront would be down slightly, with pricing up in the mid-single-digit range. I'm sure it might change if we look at it again in a few weeks, he said.
Said Horizon chief investment officer Marianne Gambelli, It's a bit early for posturing, but I'm sure all of that will begin to unfold soon enough.
I think this year's market will be a lot more moderate than last year, she said. The TV market hadn't seen that kind of strength in a while, which was caused largely by scatter dollars moving up into upfront. Fourth-quarter scatter was soft, however, first quarter is seeing a bit more activity. So it's still way too early to predict.
Advertiser Perceptions, a research company that studies attitudes in the ad industry, found in January that more media buyers expected to increase spending on broadcast, cable and digital video than were looking at cuts.
Market optimism spiked during last year's upfront, according to Andy Sippel, senior VP of media consulting at Advertiser Perceptions. Though optimism has dropped a bit recently, these scores remain relatively high, he said.
When it comes to broadcast, 34% of buyers and clients expect to increase spending, compared with 14% who expect to cut back. In cable, 32% expect an increase, with 12% projecting decreases, according to Advertiser Perceptions.
Fox's Lefkowitz said the role of data would be a wild card in this year's upfront.
Determining Data's Place
Will it be an epic step forward or a baby step forward? Lefkowitz asked. There's a clamor, but people are still figuring out how to effectively utilize it. And that goes from the clients to the agencies to the vendors.
TV networks have been ramping up their data efforts in order to combat competition from digital advertising, which has promised analytics that show exactly who is seeing ads and how they're reacting to them. For the past few years, advertisers have discovered that numbers from Facebook and other digital platforms haven't been accurate and that because of viewability issues and fraud, they're not getting the bang for their buck they expected.
Last month, NBCUniversal announced that it would set aside $1 billion worth of advertising inventory that will be sold as part of data-driven packages.
Related: No Post-Election Hangover at Fox News
Ad dollars follow audiences, Lefkowitz said. If you look at the rise of cable, it was a cost-efficient alternative to broadcast television. Digital was also a flight to efficiency because there was so much supply out there.
But it was also a flight to efficiency under the guise of effectiveness. Advertisers thought they could do more with digital ads and get better metrics and data, he said. But in my opinion, the effectiveness bloom is off the rose.
While some advertisers pay for digital ads that are seen for only a second or two, 30-second TV ads appear on a full screen for 30 seconds.
A two-second impression cannot be as effective in communicating a message as a 30-second television impression, Lefkowitz said. There's
Most recent headlines
04/08/2024
Dalet, a leading technology and service provider for media-rich organizations, is excited to announce Santiago Solanas as its new Chief Executive Officer (CEO)....
03/06/2024
Dalet, a leading technology and service provider for media-rich organizations, a...
28/04/2024
Mediahaus delivers the first SRT live-streaming sports production over 5G with U...
27/04/2024
On April 26, L3Harris Chair and CEO Christopher E. Kubasik joined CNBC's Mor...
27/04/2024
PORTLAND, Oregon Audinate Group Limited, the developer of the Dante AV-over-IP solution, announced significant new additions to Dante Connect, its cloud-based D...
27/04/2024
TORONTO Bell Media has launched 10 English and French-language FAST channels featuring entertainment, factual, news, and sports programming. The new free stream...
27/04/2024
An extensive new analysis of the news segments in the broadcast evening news programs of ABC, CBS, NBC and PBS has found that broadcasters devoted most of their...
27/04/2024
GERMANTOWN, Md. EchoStar's Hughes Network Systems has opened a new manufacturing facility and private 5G incubation center in Germantown, Maryland....
27/04/2024
Harry Pappas, one of three brothers who founded Pappas Telecasting Companies in 1971, died April 24. He was 78 years old....
27/04/2024
ATLANTA and LONDON Mexican telecommunications and broadcast company Televisa has selected Synamedia for an overhaul of its broadcast distribution....
27/04/2024
Participate in the Survey - The Impact of AI on Media and the Creative Industry
Pascal Wagner April 26, 2024
0 Comments
By participating in this surve...
27/04/2024
SDVI Rally Access Workstation Earns Two Top Awards at 2024 NAB Show
Brie Clayton April 26, 2024
0 Comments
SDVI, the leading platform provider for clo...
27/04/2024
Berklee's Music and Health Institute Launches Community Health Musician Cert...
27/04/2024
Charter Communications reported higher first-quarter profits despite continued cord-cutting and competition for broadband customers....
27/04/2024
Two environmentally-focused groups are partnering to engage the unscripted TV world in finding better ways to address climate change. Reality of Change is an ec...
27/04/2024
Sarah Garcia has been promoted to weekend anchor at KTLM McAllen, Texas, known as Telemundo 40. Starting April 27, she will anchor Noticias Telemundo 40 weekend...
27/04/2024
CBS Sports said it launched a new 24-hour free, ad supported streaming television (FAST) channel devoted to the UEFA Champions League....
27/04/2024
Comcast chairman and CEO Brian Roberts received $35.4 million in compensation in 2023, up 11% from the previous year, according to a proxy statement filed by th...
27/04/2024
Art Happens Here With John Lithgow, which sees the actor study dance, ceramics, silk-screen printing and vocal jazz with students in Los Angeles, debuts on PBS ...
27/04/2024
Remember Leave It to Beaver? Bewitched? Dragnet? When cable ratings were rising?...
27/04/2024
Next up for the weekend binge at Catchy Comedy is Gomer Pyle, U.S.M.C. Every weekend, Catchy Comedy features The Catchy Binge, a marathon of a classic sitcom....
26/04/2024
Sundance Film Festival CDMX 2024 kicks-off today with screenings in 5 theaters in Mexico City and the opening-night film, FRIDA, directed by Carla Guti rrez...
26/04/2024
[Editor's Note: This interview is part of a larger feature about the women d...
26/04/2024
Once again this year, SGL Carbon opened its doors to interested children and young people. On the occasion of the German Girls and Boys Day, which took place on...
26/04/2024
Orders1 of $5.5 billion; book-to-bill of 1.06x
Revenue of $5.2 billion, up 17%,...
26/04/2024
Five Considerations For Communications Modernization In The 21st Century
In the digital-enabled battlespace, the Joint Force needs to shoot, move and communica...
26/04/2024
CBS Sports has launched Champions League as a new, 24-hour streaming channel that will serve as the year-round destination for nonstop highlights of the UEFA ...
26/04/2024
Despite tough competition in the streaming space, Roku reported solid results in Q1 2024, beating revenue expectations, with total net revenue up 19% YoY to $88...
26/04/2024
LONDON AND TORONTO Pinewood Toronto Studios has appointed Sarah Farrell as general manager of the Studios in downtown Toronto....
26/04/2024
Quantum to Offer Advanced Filesharing Technology and Performance in StorNext and...
26/04/2024
FilmLight Colour Awards welcomes 2024 entries and introduces new Emerging Talen...
26/04/2024
Picture Shop Announces Chris Evans as Head of Unscripted
Brie Clayton April 26, 2024
0 Comments
Picture Shop announced Chris Evans will lead Unscripte...
26/04/2024
Participate in a Survey - The Impact of AI on Media and the Creative Industry
Pascal Wagner April 26, 2024
0 Comments
By participating in this survey,...
26/04/2024
Toy maker Mattel said it is working with Samsung to launch its first free ad-supported streaming television (FAST) channels later this year....
26/04/2024
Trusted Media Brands (TMB) said it named Marty Moe as president....
26/04/2024
Ron Howard is the director on Jim Henson Idea Man, a documentary that premieres on Disney Plus May 31. Henson of course created Kermit the Frog, Miss Piggy, Big...
26/04/2024
The ice continues to melt under the regional sports network business as the Seattle Kraken of the National Hockey League have made a long-term deal to broadcast...
26/04/2024
Heading into the upfronts, Warner Bros. Discovery said it launched Olli, a first-party data platform advertiser can use for converged, targeted advertising camp...
26/04/2024
CBS has renewed the drama The Equalizer, which will see season five on in 2024-2025. Queen Latifah stars....
26/04/2024
The CW has entered into an exclusive multiyear broadcast partnership for the Miss USA Pageant and the Miss Teen USA Pageant. The 73rd Miss USA Pageant will air ...
26/04/2024
Fuse Media isn't mincing words in a campaign urging its young viewers to register and participate in the 2024 elections....
26/04/2024
Dead Boy Detectives, a series from Neil Gaiman about a detective agency staffed by ghosts, debuts on Netflix April 25. George Rexstrew and Jayden Revri are in t...
26/04/2024
The Story Collective has gradually repurposed the former Mortlake Brewery to include production offices, workshops and sound stages
By Matthew Corrigan
Publi...
26/04/2024
Perkett joins the company following a 25 year career in product management, product marketing, engineering and user experience (UX) across multiple industries
...
26/04/2024
Teradek, the industry leader in wireless video transmitters and receivers, announced today the launch of new Bolt 6 LT 750 and Bolt 6 Monitor Module 750 RX with...
26/04/2024
NEW YORK Amagi has appointed Richard Perkett chief product officer (CPO)....
26/04/2024
WASHINGTON, D.C. The National Association of Broadcasters (NAB) has announced the results of the 2024 NAB Radio and Television Board of Directors elections. The...
26/04/2024
EL SEGUNDO, Calif. & NEW YORK Mattel has announced a deal to launch its first three 24/7 free ad supported streaming (FAST) channels on Samsung TV Plus, Samsung...
26/04/2024
PORTLAND, Maine Viewers here can now receive the NextGen TV signals of five local stations with the launch of ATSC 3.0 service from host station WPFO, which is ...
Why This Matters The bulk of TV's national ad inventory for next season gets sold during the upfront, setting the tone for the industry's financial outlook.
