As TV’s week of upfront presentations—a far more muted week of festivities than usual—comes to a close, the period for agency buyers and media sellers to strike deals for the next broadcast year kicks off.

But this year’s dealmaking might be similarly mild as the presentations, as economic conditions and viewership fragmentation may extend talks well beyond the standard timeline and damper pricing.  David Campanelli, executive VP and chief investment officer at Horizon Media, said he expects there to be a shift in power this year, with advertisers more able to negotiate on their terms. 

Campanelli sat down with Ad Age to discuss what to expect from this year’s ad haggle, the state of the diverse investment market, the adoption of alternative currencies and why CPMs won’t be the center of this year’s talks.

This conversation has been lightly edited for length and clarity.

What is the top-of-mind issue facing the buy-side heading into this year’s upfront negotiations?

The biggest issue we’re faced with right now is uncertainty about what’s to come in the economy and what that means for our clients’ businesses and ultimately what it means for their budgets. The upfront timeframe has never worked well for most advertisers. Negotiating in May, June for something that starts in August or even January, and carries through the next 12 months after that, is not ideal timing in this day and age, particularly when the majority of what we’re buying for clients is digital in nature, flexible in nature, and the upfront is a smaller piece—it’s still an important piece—but a smaller piece. We still have this anchor of relatively inflexible media that we're committing up to 18 months ahead of time for by the end of those deals versus our digital placements, which are much more flexible and much more viable as premium alternatives to what’s happening in the linear TV space. So, that uncertainty really puts us in a position where it’s harder and harder to fix budgets this far in advance and leads us to a more drawn-out and questionable upfront marketplace this year.

You mention this has been a culminating issue, perhaps amplified by the economy this year. Do you see permanent shifts happening in the upfront timeline?

We’re still going to see the presentations happen in mid-May; that becomes the unofficial marker of when the marketplace opens. I don’t think that’s going to change, but I also don’t think we’re going to see three weeks of negotiating and we’re done. It’s going to be much more drawn out and much more individualized conversations, sort of like the summer of 2020, when everything was disrupted with COVID. That was a very elongated and fairly quiet upfront period, and I think it’ll behave much more like that because the timing to market is going to vary by agency, by client, by network partner.

As media companies’ portfolios grow so rapidly, and some of those portfolios come in package deals that may connect inventory you don’t need with what you actually want, how are you viewing optimizing budgets for clients’ needs?

It’s always been a concern in the black box of the sellers’ data optimization tools—are they optimizing to their benefit or they are optimizing to our benefit? The big difference today is that we’re bringing our data to the table versus relying on their data or a proxy that they would use to mimic who our target is. [Now,] we’re bringing that data to the sellers. We’ve built that out with our own data infrastructures, clients have their own data infrastructures and we have set up connections with virtually every seller out there, whether it be via cleanroom or direct, that we can port that audience to them. They are now optimizing on our data and that’s a protection. 

The second part of it is at the end of the day, what matters is the business result and everyone’s getting more sophisticated on measuring what that business result is. What was the outcome? Did it elicit greater sales? And once we get that fully figured out, all the other stuff is a proxy to get there.

There’s so much buzz around pricing this year. What are your thoughts on this year’s market in general, as well as how amenable sellers have been in conversations so far?

This year, given the state of the economy and state of the media economy and advertising economy, our conversations have very much centered around the desire for more volume. That was not the conversation the last several years. The last several years, it was about price first, and I read from some of the sales leads that you’ve talked to that money was left on the table last year because it was about price, it wasn’t about volume, and as the market deteriorated over time that in hindsight might have been not the right direction. So everyone’s leading with volume this year, and when leading with volume that means price is going to be softer without a doubt. How much softer—whether that’s significant rollbacks—is yet to be determined, but certainly it’s headed in that direction given the conversations are very heavily about volume at this stage.

We’ve reported some of the high CPMs some of the streamers ask for—is there a thought that could drive more money from TV to the likes of YouTube, TikTok or even the CTV platforms that host the streamers?

All of the streamers, very generally speaking, launch with very small user bases and there’s usually a strong amount of advertiser interest, and that’s why the CPMs start high. But over a fairly short period of time, as their subs grow and their usage grows, the usage starts to way outpace the ad spend. What we’ve seen really across the board in the streaming space is new properties that have been launched the last couple of years is a high starting price, but it comes down year over year over year, and I do think we’ll see a point where the linear CPMs and the streaming CPMs will meet in the middle over time.

But, one of the reasons why the upfront is not as critical as it used to be—it still has value and it’s still important and there are still benefits to participating upfront—advertisers have so many other outlets for video needs and premium video needs that it’s not the be-all-end-all the way that it used to be. Those are YouTube and it’s TikTok and it’s all of those things that you mentioned. And there’s a difference: YouTube is different content, different length than typically what’s on network and streamers, but it’s also reflected in the CPMs that we pay. We pay an appropriate price for the content we’re airing in. You just can’t ignore YouTube. It is the largest CTV streaming entity out there and you just can’t ignore it. The viewers have spoken, so to speak, and are spending time there and that’s something that can’t be avoided anymore—it’s not just short videos on your phone. Now it’s on the TV screen too.

Related: YouTube debuts unskippable 30-second ads

On the thread of budgets and money, what are you seeing in the DE&I investment marketplace, whether that’s diverse-owned or targeted media, this year?

I would say we are seeing similar momentum as we have the past several years, going back to the summer of 2020 when this market-wide initiative really started taking hold. We’ve spent time—needing to be the experts in this space—educating ourselves on all of the offerings out there, big or small, and opening up our opportunities to as many partners as possible. It is absolutely an area of focus for us and for our clients. It’s a special section within our communications to clients.

On this topic, many agencies or brands have released commitments or spend percentages in the DEI market. With everything we’ve talked about—a slow market and a tough economy—how do you hold clients accountable to make sure their investments continue to grow?

We’ve never been in a position to have to hold our clients accountable. Our clients are holding themselves accountable, and it is our job to educate and recommend what’s best for their business in this space to best deliver their audience. But we have not had any problems with keeping our marketers accountable on this.

Zooming out from all the money talk, what are the major trends you're seeing across the sellers this year and what they’re bringing to the table?

I knew we couldn’t have this conversation without talking about alternative currencies. I’d say that’s the biggest conversation point that we’ve been having with sellers to date, and it’s an important one. It’s one that we need to see progress on this year. Quite honestly, last year there was a lot of conversation about alternative currencies and very little action when it came time to actually transact. We need to move that forward, and we need to actually put into practice using alternative currencies for our deals.

Second, like I touched on before, the sellers want to maximize their entire portfolio, and I think using data to best reach our audience across their portfolio moves us in the right direction without being too siloed about what we’re buying.

Horizon has made commitments to using alternative currencies in the past. Do you have renewed commitments or what is the outlook for this year?

We’ve worked with all of the companies out there in the alternative currency space as well as with Nielsen. We expect to transact a meaningful amount of deals on alternative currencies this year, both on a demo-guarantee basis, but also on an advanced audience basis, which is really where the alternative currencies excel in that they have a 30 or 40 million household base that we can match our targeting data to versus Nielsen's 40,000 household panel.

And in the diverse-owned and targeted space, that is a space that has been particularly challenged with the Nielsen panel and under-representation and challenges in measuring smaller networks, cable networks in particular. The big datasets do a much better job of that. Allen Media Group announced a VideoAmp partnership and we’re excited to engage with them on VideoAmp for our negotiations.

And what does “a meaningful amount of deals” mean in moving forward this conversation on a multi-currency market?

For us, it is transacting across a variety of network partners and a variety of different demos or targets. We need a breadth of experience across the network partners, from the larger broadcast networks to smaller cable networks, and we also need to do it across a wide variety of targets. And on our end, a wide variety of clients so we can see the differences in younger demos versus older demos, larger networks versus smaller networks, etc. It’s all about collecting more and more data in performance of how these schedules are tracked and posted and estimated. And the more breadth of data we have, the better it will be.

What are your goals you hope to have achieved on the other end of upfront negotiations this year?

Our goal is always to deliver on our client’s needs and do it in a way that’s effective and efficient. Those two things together are important—it’s not one or the other. And I would like those conversations to be about how we’ve delivered more value to them, have added flexibility to their upfront commitments to follow audiences as their consumptions change and that we’ve made progress in terms of identifying and using alternative currencies to measure their media throughout the year. 

Those are the three things I would hope to be able to say at the end of this and not what’s happened the last couple of years, which is why CPMs were so expensive. That needs to be avoided this year, it will be based on the economic factors going into this upfront.