It's been nearly a month since the broadcast networks unveiled their fall schedules to advertisers and media buyers, and despite all the generous lead time, very little in the way of substantive upfront business has been conducted.
Get used to it. According to sales executives and media buyers, slow is the new black.
Before we get into the various factors that are contributing to the glacial marketplace, a bit of historical context. Three years ago, and nearly to the day, CBS had crossed the finish line well ahead of its rivals, after having quietly locked down upfront deals with each of the major media-buying agencies. In short order, the other four English-language broadcasters followed suit; in fact, the market moved so quickly that all the network business was accounted for by June 12, a mere month after the New York upfront presentations.
Such was the case going back as far as just about anyone can remember. Client budgets were registered the week after the upfront shows, and buyers and sellers began negotiating after Memorial Day weekend. Barring the occasional glitch, the broadcast business was always nailed down by mid-June and the last of the cable deals were secured before the fourth of July.
That lock-step march hit a stumbling block in 2013, when an irresistible-force-meets-immovable-object dynamic necessitated a more leisurely approach. While the rest of the pack breezed through without issue, ABC and NBC demanded higher ad rates than the buyers were willing to pay. Neither side blinked for 10 weeks, and ABC didn't finish up until August 1 -- two days after NBC wrapped up its last deal.
While last year's bazaar seemed like a return to form (most of the heavy lifting was done by the end of June), people on both sides of the negotiations said the 2014-15 upfront would likely be the last easy-breezy affair. What we're seeing this year is the validation of last season's suspicions.
For the most part, the new slow-poke upfront reflects a more complicated negotiation process. While the infusion of next-gen data metrics into the deal-making process may not necessarily grind talks to a screeching halt, the degree of difficulty at shops like NBC Universal is impossible to overlook. Buyers say that NBCU is far ahead of its peers in terms of what it can offer on the data front, and the sheer scope of its cross-platform TV network and digital properties is daunting. A careful buyer can't just charge through an NBCU negotiation like a contestant on "Supermarket Sweep."
Moreover, the big data push may fundamentally change the nature of the upfront transactions. Turner Broadcasting, for example, is pushing clients to consider moving away from the constraints of the hidebound 18-to-49 and 25-to-54 demos and toward deals made against total-audience deliveries. The parent company of TNT, TBS and Adults Swim is also offering ROI guarantees for marketers who buy across traditional TV and digital. That represents a significant change in how video is bought and sold, one that may require more than a little hand-holding.
Then there's the implacable drumbeat of the currency debate, which is being pounded out by the biggest media shop. GroupM's Rino Scanzoni has said that he'd like to see the bulk of his deals written against C7, paying for a week's worth of commercial ratings instead of the three-day standard, albeit with favorable pricing in exchange. While cable networks appear wholly uninterested in making the leap from C3, arguing that the four extra days of deliveries don't add up to a hill of beans -- statistically, C7 bumps up average prime time ratings by a mere one-tenth of a point -- broadcasters have shown more interest.
Also playing a key role in, well, slowing the upfront's roll is an unprecedented push into digital. As margins at the media agencies continue to be razor-thin, and the struggle to keep clients happy has been met with an unprecedented surge of account reviews, buyers have moved more and more dollars out of TV and into digital. And while the discounts are perhaps enviable in the near term, the corporate balance sheets suggest otherwise. Case in point: Procter & Gamble's decision to yank an estimated $400 million out of its TV budget coincides with a string of missed sales targets. Insert shruggie emoticon here.
Of course, basic market realities cannot be overlooked. There appears to be very little urgency on either side of the table, as buyers say there are few must-have TV properties beyond live sports -- and much of that inventory is accounted for by multiyear deals -- and a handful of scripted overachievers like "Empire" and "The Walking Dead."
At the same time, sales execs aren't necessarily in a rush to get business done, either. Given that at least one big agency has been vocal about securing price rollbacks (a scenario that hasn't played out in a half-dozen years), diving headlong into the 2015-16 negotiations could be like jumping into an empty swimming pool.
From a content perspective, buyers seem underwhelmed by the fall broadcast schedule, as many are wondering if the Big Four have been too conservative in their approach to their prime-time rollouts. "So many shows simply didn't work last season, and yet they all seem to be holding back the really promising stuff for 2016," said one buyer, who added that the shakeup in late night may make for a more compelling opportunity for some of the agency's more adventurous clients.
Ad sales execs this week said they spent a lot of time staring out the window while waiting for budgets to roll in, but there have been some substantive talks. Deals could begin in earnest next week, but for all the reasons cited above, don't expect a mad rush to the table.
"I would characterize it as an orderly upfront," said one sales exec. "We're exactly where I figured we'd be when I started planning for the upfront. It'll get done when it gets done.
"Put it this way: I haven't planned my kids' summer vacation."
For all that, things won't really start to get hairy unless a huge chunk of business remains unfinished by mid-summer. But there is a drop-deadline. "Look, if you're advertising in fourth quarter, you need to go to order by August, depending on when your flight starts," said another ad sales boss. "I mean, there's a process that goes along and it's not like after the upfront's over it's just done. Drag it out long enough and you won't get on-air."