$137.8B U.S. ad spend for top 200 advertisers
All's quiet in the TV upfront marketplace. Following last year's relatively slow pacing for upfront deal-making -- the time when networks look to secure ad commitments for the fall season -- this year's marketplace is expected to once again be drawn out through the summer months.
Upfront negotiations traditionally don't truly get underway until the week following Memorial Day, but media buyers often said in years past that they had done some early deals by this point. That doesn't seem to be happening this year, at least not yet.
"No network has been aggressively pushing," one media buyer said.
By the end of May 2013, Viacom had already completed deals for 50% of the ad inventory it intended to offer as part of upfront negotiations. The company, which owns Nickelodeon, MTV and VH1, among others, has been an early mover in upfronts the past several seasons, writing business during the days following broadcast presentations by offering what they believe to be more favorable terms to move a high volume of inventory. But this year even Viacom seems to be holding back, at least so far.
"I think it is a sign of the overall marketplace that things will play out slower than usual," a second media buyer said. "I think it's a good indication that volume is down on the client side, and likely, more broadly than we had originally estimated."
Media buyers are currently waiting on clients to register their ad budgets for the fall season, but some have indeed suggested that marketers' budgets may be down this year, albeit not dramatically.
The biggest question mark appears to be in auto companies' TV advertising. Several buyers said early indications suggest the category could be flat to down from last year.
All eyes are on NBC, which is expected to set the tone for negotiations after ending the season as the most-watched network among the all-important 18-to-49 demographic for the first time in a decade.
"Sunday Night Football," "The Voice," its new hit drama "The Blacklist" and the Olympics have all helped boost the network, which had been trailing rivals for years. NBC will also air the Super Bowl in 2015, which is expected to be a significant part of the company's discussions as it goes to market pitching broadcast, cable and digital inventory as a package.
Media buyers expect NBC to seek a price "correct" during upfronts, having lagged its rivals on rate hikes during its years of struggle.
Sports is expected to carry more weight in prime-time negotiations. All of the Big Four broadcasters spent noticeably more time discussing their sports franchises, specifically football, during their presentations last week.
Conversations have already gotten underway for CBS's airing of "Thursday Night Football" in the fall, according to buyers.
"The NFL ad budget is only so big so the question is where will the money come from?" a third buyer said. "It will likely come from prime upfront."
The absence of a concrete prediction by CBS CEO Les Moonves has also raised some red flags among buyers. While Mr. Moonves, who is known for his optimistic upfront outlooks, has said he expects CBS will once again lead the marketplace in volume and pricing, he hasn't gone so far as to put numbers to that forecast, as he has done in the past.
"It's telling Les made no pronouncement at all," another buyer said.
While deal-making may not have truly started, preliminary conversations have been happening for months as networks began talking up new data and audience-targeting offerings.
Estimates for this year's upfront haggle look a lot like last year. The volume of dollars advertisers will commit to broadcast is expected to decrease about 2% to 3%, according to analysts' and media-buyers' forecasts, while cable is expected to grow by about 5%.
In last year's upfronts, broadcasters secured anywhere from $8.7 billion to $9.3 billion, depending on who you believe, and the total commitment was widely considered flat compared with 2012. Cable secured about $10.2 billion, a 4.3% increase from the year prior, according to the Cabletelevision Advertising Bureau.
When it comes to the cost to reach 1,000 viewers, an industry standard known as CPMs, forecasts range from low-single digit increases to as much as a 7% hike for broadcast, and an approximate 5% uptick for cable.