Upfronts 2016

NBCU Offers Guarantees Based on a Variety of Metrics

A fundamental element in the TV Upfronts has been use of a simple metric. Nielsen audience data, i.e. ratings generated by age/gender, have almost always been the sole basis for negotiations.

But increasingly, new metrics have taken hold.  NBCUniversal says it will guarantee “the targeted delivery of optimized investments as the exclusive currency” with “select” marketers.  Among the components under consideration are advertiser’s first-party data, information from movie-centric subsidiary Fandango, viewership collected from Comcast (parent company of NBCU) set top boxes and other third-party research.

NBCU is not alone. Fox Networks Group, among others (e.g. Viacom) have said recently that it will offer guarantees for advertisers using first-party marketers’ research and other sources.

Changes are underway.  Nevertheless, observers are saying that, during the upcoming 2016/17 Upfront, Nielsen reported ratings will still serve as the primary source for the negotiations of tens of billions of dollars of commercial inventory.

Upbeat Upfront Predicted for Broadcast

This year’s broadcast TV upfront will likely dramatically reverse three years of declining upfront volume with rising revenue and higher pricing according to this TVNewsCheck article by Wayne Friedman.

CPM prices are expected to rise 7% to 9% according to media estimates.  Additionally, a rise in total dollar volume, up 3% to 4% overall, to $8.7 billion is forecasted.

These positive projections about the 2016 Upfronts are based on the current scatter market according to this article.  The sharply higher scatter revenue is a result of higher spending by pharmaceutical, food, and automotive marketers.

Friedman also points out that the concerns about digital media by media executives, who have questioned the poor viewability of digital video ads, issues of fraud and ad- blocking by consumers, have benefited the broadcast and cable networks

Geri Wang, President of Advertising Sales and Marketing, ABC Television Network commented on the upfront market, “It’s a strong marketplace; there looks to be more money in the overall TV economy.”  She added, “Advertisers still seek high quality.  People still care about premium TV and premium video.”

The Growing Case Against Holding the Upfront

Toni Fitzgerald addresses the TV upfront in this Media Life Magazine article and discusses the relevancy of the upfront in the digital age.

Among the factors impacting the upfront:

-New technology including programmatic.

-The evolution of television viewing.  Since viewers watch TV on their own schedules, across different devices, the fall premiere model may no longer be relevant.

-There are fewer must-buy shows on broadcast

-Some advertisers, such as General Motors and Procter & Gamble, have pulled out of the upfront or sharply cut their buys.

-Some networks are eliminating their upfront presentations.

Fitzgerald concludes, “For the next few years, the upfront will continue. But for how long after that is really anyone’s guess.”

CPG’s Moving to Leverage Advanced Data, While Waiting for Scale

According to this Media Post article by Karlene Lukovitz, consumer packaged goods brands continue to focus their marketing budgets on television.  The challenge is to harness TV’s reach more efficiently and the goal is to integrate that reach into a cross-platform audience model based on buying audiences, regardless of screen.

This article presents some of the highlights of interviews with Srishti Gupta, President of the IRI Media Center of Excellence.  She discussed the progress and remaining challenges of harnessing consumer purchasing and other data beyond demographics in television, especially in a programmatic environment.

Advertisers began to experiment with TV planning based on consumer purchasing data in 2015, “and that is going to impact buying and negotiations in 2016,” according to Gupta.

Gupta stated, “We’re seeing increasing desire to move away from demo- and age-based targeting. As digital media have led the way for custom audience targeting and [fast] attribution-based measurement, advertisers are looking for similar solutions and accountability for TV.”

“With digital spend rapidly growing and projected to beat TV in the near future, and experimentation with addressable TV and OTT,” she added, “there’s an increasing demand both for cross-platform, as well as TV, measurement.”

Highlights from Simulmedia’s PeopleFront Event

In the prior century, an Upfront meant a broadcast/cable network event created for advertiser/agency senior staff. The focus was programming, i.e. the schedule. A one or two-hour presentation (often with slides developed by research teams) was followed by meeting talent, up-close and personal.

This format still exists but the dozens of Upfronts now span a panoply of companies, tackling a variety of media industry firms. Simulmedia is a TV  marketing technology company focused on proprietary science and software – key features of the evolving media ecosystem. They recently held their version of the Upfront, their annual “PeopleFront.”  It was comprised of four panels featuring industry “celebrities.” One session was about TV & Wall Street; another tackled key research issues; a third discussed cross-platform and data-driven decisions; the last panel was comprised of TV buyers and sellers.

Here’s one quote from a panelist:

“There’s a myth that there’s a vast amount of people who never watch TV.” – Steve Hasker, president and COO of Nielsen.

Ready or Not, Here Come The Upfronts

This MediaPost article by Adam Buckman provides an overview of the Upfront and NewFront presentations, which started on March 2 and will continue for almost three months.  The majority of these presentations will occur in May.

Some of the companies which previously had big Upfront presentations are opting for private, smaller presentations.  According to this article these networks “apparently feel they are not worth the investment — the implication being that they can book more business by making the same investment (or less of one) in a series of smaller presentations.

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Upfront 2016: TV Networks May Gain Upper Hand for First Time In Years

The 2016 Upfront season may represent the first time in four years in which advertisers may have to pay higher rates of increase to reach TV audiences, according to this Variety article by Brian Steinberg.

Predictions by media buyers include:

-“Some money will go back to the upfront.”  TV may secure more advance ad commitments for coming shows for the first time since 2011.

-“In 2016, the TV networks are likely to seek CPM increases anywhere from 5% to 9%.”  The current market could reverse years of narrowed CPM rates.

-The rise in rates may be due to audience erosion.

According to this article, “For those seeking broad reach, sight-sound-and-motion and brand awareness traditional TV still utterly dominates all alternatives despite the growth of digital media owners and increasing consumption of video on internet-connected devices,” said Brian Wieser, a media-industry analyst with Pivotal Research Group, in a February research note.

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New Metrics on the Way, But the Upfront Comes First

New cross-platform measurements from Nielsen and comScore have been introduced.  However, according to an article in Broadcasting & Cable by Jon Lafayette, clients, such as networks and ad agencies, are currently evaluating the data.  This data is not expected to have much of an impact on the 2016 Upfront.

According to this article:

“We’re still in the ‘asking questions about the numbers’ phase,” says David Poltrack, chief research officer at CBS. Poltrack says his top concern is that all of the viewing not counted in current measurements is included in the new metric. CBS doesn’t want clients to think the new numbers include all viewers if some are still excluded.

While Nielsen and comScore are trying to get their figures into clients’ hands in time for the upfront, Poltrack says no one expected them to be used until the start of the new TV season.

“Everybody is trying to figure out how to build a cross-platform process on the agency side and on the media side and those conversations are going on,” he says. “There no definite plan yet.”

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Programmatic TV? Not in 2016, Though Data-Driven TV Buying is Hot

According to this Campaign Live article by Todd Wasserman, Programmatic TV may represent the majority of the overall TV ad spend in the future; however, that could take a decade or more. Streamlining ad buys and achieving precise viewer segmentation are among the appeals of programmatic.

However, the upfronts and human-based selling are likely to continue during this transition period.

Todd Gordon, general manager of programmatic TV at TubeMogul concludes that in 10 years, networks will still be holding upfronts. “There’s always going to be big-event TV and custom stuff that you want to do and high-touch type stuff,” he says. “Software isn’t going to do that for you.”

The impact of addressable TV and “TV Everywhere” are also discussed by Wasserman.

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Limited-Interruption Advertising in Digital-Video Content: An Analysis Compares the Effects of “Midroll” Versus “Preroll” Spots and Clutter Advertising

In this Journal of Advertising Research Digital First article, the authors, Jean Brechman, The College of New Jersey; Steven Bellman, University of South Australia; Jennifer A. Robinson, RMIT University; Amy Rask, MediaScience; Duane Varan, MediaScience, compare potential advertising formats for digital video.

The researchers found that digital video offers new opportunities and formats for television advertising. One of these new formats is “limited-interruption” advertising, in which each midroll advertising break (shown during the video content) features just one commercial.  Using a controlled experiment, this study compared limited-interruption advertising to preroll (before video) and clutter advertising, on measures of advertising intrusiveness and effectiveness.

Among the conclusions of this paper:

Limited-interruption advertising outperformed the other two digital-video formats, in terms of branded advertisement recall.

Repeated-exposure limited interruption, which is used by many networks online, offers a way of achieving exclusive high brand awareness but at the cost of potentially reducing advertisement liking.

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