One buyer said the market -- where the big broadcast networks sell the bulk of their ad inventory for the coming season -- could begin in earnest within two to three days. Another buyer cautioned the networks may not be ready to act until the majority of marketer budgets are registered, which could push the start into next week.
Disparity in pricing
Already, there seems to be a disparity between what the networks want to charge and what buyers are willing to pay. One buyer said some networks are feeling bullish and could ask for CPM increases of 5% to 6% -- the cost of reaching a thousand people, a standard metric in these types of ad sales. But another buyer suggested those requests are too optimistic; advertisers are looking at paying increases of 1% to 2% and may even ask some networks to roll CPMs back by 3% to 4%.
Several buyers said the two sides hope to complete a large part of their bargaining by July 4.
Before the upfront market can begin in earnest, advertisers first have to tell their agencies how much money they will make available to spend on TV advertising. Networks generally prefer not to start bargaining until this process is largely complete, so they know the size of the market and how they should maneuver.
This year's market has been slow to open. Advertisers are still considering Nielsen's commercial-ratings data, which analyzes viewership for commercial breaks. They are also pondering the fact that networks are pushing for the inclusion of viewers who watch programs as much as three days later via digital video recorders into those Nielsen ratings.
Health of the medium
Last year's market came in between $8.5 billion and $9 billion, marking the second straight year in which the upfront market fell. The numbers are not concrete; they represent advertiser commitments to networks, but not money paid. Advertisers can withdraw or move their dollars for any number of reasons. The upfront numbers are more widely viewed as a directional indicator about the health of the TV medium in general.
In years past, the upfront was a quick affair, sometimes wrapping up in mere days. When times are more uncertain, or the economy is suffering, upfront haggling can take weeks. These days, advertisers have a dizzying array of emerging media opportunities to consider, and many of them have little to do with traditional TV. What's more, networks have been trying to build digital extensions for their programs, making for more complex negotiations.