Despite alarm bells around the uncertain state of the economy, the outlook for this year’s TV upfront ad market may not be as grim as it feels. Client budgets are generally healthy, multiple media buyers told Ad Age, but a confluence of external factors are weighing heavily on typically strong categories—the economy being just one.

Related: See the 2023 TV upfronts and newfronts calendar

By seller accounts, the market is still growing. Over the past month, the major media companies each reported their earnings from the final quarter of 2022, with the majority showing year-over-year increases in advertising revenue. Both Fox and NBCUniversal reported increases in TV advertising, while Disney showed a decline across its media assets. Both Paramount and Warner Bros. Discovery saw an increase in ad revenue for their streaming assets, but a decline in linear advertising.

“When people say, ‘Are you seeing budget declines because of a recession?’ The answer is no,” said one buyer. “But are we seeing budget declines in some categories? Yes.”

Some examples include the ongoing post-pandemic recovery of historically big-spending categories such as insurance, pharmaceutical and automotive. Rather, most categories are keeping their ad dollars under close watch out of caution. The buyer recalled a client that asked if they should be concerned simply because they had read conditions were more dire than they were seeing in practice.

The general state of fear has caused clients to broadly prefer holding long-term commitments despite having the money, choosing to spend closer to air dates, said the buyer. 

A second buyer compared the current state of TV advertising to this year’s Super Bowl sales. Fox came out of last year’s upfront with strong sales, announcing a 95% sell-out in September, before a multi-month lull of advertisers selling back inventory. Demand then surged again just before the Big Game.

“[Clients] are spending, they’re just spending slowly and much closer to air,” said the buyer. “They’re just really planning for the uncertainty and worst-case scenario,” noting that some companies are withholding marketing during waves of layoffs or cost-cutting for the sake of optics.

The upfront looms

Although sellers such as Disney and NBCU have touted their early approaches to upfront negotiations, holding conferences early in the year and looking to woo clients at industry conventions such as CES, buyers and their clients have been less eager to start discussions so soon.

A third buyer said clients have yet to share budgets for the upcoming upfront season and they noted the need for flexibility will be more important than it was even during the pandemic—most notably the ability to waylay final commitments into late summer. Rather than a pure result of the economy, the buyer said it’s a reflection of evolving business models more focused on performance advertising with digital platforms.

“I think the healthy [upfront] seasons are going to be less and less no matter what,” said the buyer, adding the major broadcasters may find more resistance to the expectations that prices can increase just because they typically do year-to-year.

To combat these changes, a fourth buyer said the networks may have to rethink their sales strategy. Recent trends such as requiring buys across a seller’s full portfolio of assets to get the one a buyer truly wants, or adding on additional costs for advanced advertising capabilities, won’t fly. 

“If [the networks] really want to see a market move, they’ve got to offer the financial incentives to move it,” said the buyer. “And right now, they’re still trapped in their own legacy thinking” of making demands for bigger buys and more tech without making accommodations for the higher costs of it all.