The Association of National Advertisers is calling on the TV industry to shift its annual upfront to a calendar basis.
The move is part of an effort by the organization to increase productivity and transparency in media investments.
“As stewards of business and brand growth, marketers must transform the current sub-optimal media ecosystem,” Marc Pritchard, chief brand officer at Procter & Gamble and ANA chairman, said in a statement. “While there are benefits to the upfront, it remains an antiquated business system that needs reform. Other efforts such as cross-platform measurement, brand safety, anti-fraud, data transparency, and privacy are also taking way too long and must be accelerated. This industry must constructively disrupt itself to create sustained, systemic value and that requires all marketers, publishers, broadcasters, platforms, agencies, suppliers, and trade associations to come together now.”
Pritchard notes that returns on media investments are below industry potential.
The upfront–when media sellers look to secure a bulk of their ad commitment for a new season– typically takes place in the spring, when media agencies commit a certain amount of client’s ad budgets for commercials that won’t air until the fall. Deal making usually kicks off after Memorial Day and wraps up around the 4th of July.
This year, in the wake of COVID-19, many agencies and brands have said they will delay making commitments. TV sellers have said that they will be ready to conduct business with agencies and brands whenever they are ready to do so.
The ANA’s report recommends the current upfront market should be delayed until there is greater clarity on business operations and how COVID-19 will progress.
The organization is not looking to change the year-round negotiation process that currently exists, or the fundamentals of marketplace transactions, where each company makes its own independent determination of when and what advertising time it will purchase. Instead, they are calling for a choice, more flexibility and a “better-timed” upfront.
“The fundamental structure of the upfront marketplace provides benefits to all parties. The timing of the marketplace to accurately forecast supply and demand has been challenging,” said Rob Master, VP of media and digital engagement, Unilever. “We believe shifting the upfront to calendar year timing will benefit the entire industry, provide a more accurate view on supply and demand, and allow the industry to reform.”
Of course, plenty of marketers do negotiate deals on a calendar basis already. The ANA is hoping that if more business is done in this way it will provide more certainty in what media companies are selling and give marketers more time to sort out their budgets.
The TV industry has been grappling with production delays and the absence of live sports due to social distancing amid the pandemic. While the country is slowly opening up and there are indications that some sports leagues will return by the fall, the ANA is essentially looking for deal making to wait until there is more clarity on how TV productions and live sports will resume.
The ANA outlined changes in a white paper created by its media advisory board, which includes senior level executives from Bank of America, Mastercard, McDonald’s, Nestle USA, P&G and Unilever, among others.
The desire for these changes are being driven by the challenges posed by the current climate of uncertainty that started with the COVID-19 pandemic, according to the organization.
“The marketing community must revisit the media-buying environment and develop changes that will accommodate the new reality forced upon us,” ANA CEO Bob Liodice said in a statement. “It is a fundamental imperative to include the evolution of the upfront among those legacy systems that need change and improvement.”
Pritchard outlined several initiatives to help move the industry forward, which include more collaboration to drive global advances in cross-platform measurement; the elimination of harmful content online and alleviating brand-safety concerns; creating national privacy legislation through the development of one common standard among all states and an industry effort to address the transition to a digital ecosystem without third-party cookies.
