This year's TV upfronts may have more substance than sizzle—and it's about time
Few people know their way around the TV upfronts as well as Rino Scanzoni, who for more than 30 years led negotiations for agency powerhouse GroupM and the former MediaVest. So we asked him to weigh in on what changes the pandemic will bring—and which should last.
The upfront TV buying process has changed little over the last 50 years. Perhaps the pandemic can serve as a catalyst to disrupt that.
Initially, the upfronts provided the means for advertisers to make longer-term commitments to programs that met their audience criteria in order to secure sponsorship. Then it evolved to a futures market for national advertising commitments, managing the scarcity of desirable inventory for both buyer and seller.
Then came the consolidation of agencies into holding companies and the merging of TV assets into media conglomerates. A handful of players now exist on both sides driving the bulk of TV ad transactions in a world that is being altered by technology, content distribution and data availability.
Yet the transactional process has remained little changed. While scarcity is now driven by audience diminution rather than demand growth, it will continue to support an upfront TV market for the foreseeable future. But there are ways to improve the process.
From live to virtual
I have participated in these presentations only virtually for some 15 years. Initially it was a time when the online feed was subject to technical glitches and buffering delays. It is now seamless, providing an excellent communication platform. It has allowed me to focus on the important aspects of the presentation, while multitasking when the subject matter was less relevant.
Upfronts can be efficient and effective if presented virtually—as they are this year due to the pandemic—instead of as live presentations at landmark Manhattan venues.
The inaugural event for the upfront buying season was originally designed to allow advertisers to screen full new content offerings for the upcoming fall season. But it evolved into a heavily scripted sales pitch timed to get clients to the cocktail reception within 90 minutes.
The screening of full episodes of shows is no longer practical or necessary given the transition to an ongoing, full-year programming season and the
focus on audience buying over program sponsorship. There is significant value in these presentations if they can transition to a focus on strategy,
innovation and the unique positioning of a network’s assets instead of hype and hard sell.
A permanent change to virtual presentations would highlight substance over sizzle and allow for the communication of a clear value proposition. While this will reduce the opportunity for publicity and the broader attendance that live events have provided, it will make the messaging more effective and reach the decision makers that count.
A new selling season
The upfront marketplace is not and should not be restricted to a June-July time frame for broadcast year commitments or to a November-December time frame for calendar year commitments. An upfront is a multi-quarter commitment that can and should be made when a client is comfortable in making a longer-term commitment and the marketplace can offer a pricing advantage to justify doing so. Clustering upfront spending in aggregate across clients and holding companies in traditional timing windows in a marketplace that is not directly volume discount-driven plays to the advantage of only the seller.
Counting the house and creating a herd mentality has been an effective seller’s strategy for years. Agencies should instead go to market with timing that meets a client’s needs, not that of the vendor. Spreading out commitments will provide the necessary flexibility for clients, while enhancing the buyer’s leverage position. Commitments should be a blend of upfront and scatter modeled to maximize pricing and value positions for a client relative to an overall marketplace picture.
Focus on clients
The upfront negotiation should be focused on individual client pricing and requirements, and not a percentage rate of change for a portfolio of client budgets. Discussions on an aggregate CPM rate of change, while simple and convenient, does not address the significant disparity in pricing across clients, nor the optimization of their individual price/value position. This is critical as audience targeting moves to more sophisticated and customized consumer-driven data sets from generic demographic targets.
As the industry eventually moves negotiations to a programmatic platform, it will be necessary to transact on an individual client price basis over that of an aggregated portfolio with shorter lead times and increased frequency. This will need to be done in context to a forecasted estimate of overall market pricing potential to ensure client value is optimized.
This pandemic will obviously disrupt the media marketplace significantly as consumer behavior faces a new normal and companies are forced to adapt their marketing strategies accordingly. It will also give the TV marketplace the opportunity to rethink the buying process to better serve individual clients and compete more effectively.