Madison Avenue is calling for a different route for the billions of dollars it sends to TV networks every year.
A group representing the nation’s biggest advertisers has called for massive changes to TV’s “upfront” market, an annual ad-sales process in which U.S. TV networks try to sell the bulk of their commercial inventory for the next programming cycle. For decades, the networks have kicked off negotiations in mid-May, and tried to wrap them by summer’s end. The haggling has deep ties to historic business cycles: car companies used to unveil their new vehicle models in the fall, and so TV began to launch its new season at that time.
Regular cycles, however, have been upset by the spread of the coronavirus pandemic. And the Association of National Advertisers, an industry organization that represents 1600 companies that spend more than $400 billion each year on advertising and marketing, has begun to push for a new system.
“As we navigate uncertain times on a global and unprecedented scale, all of us are having to re-engineer every aspect of how we go to market,” said Meredith Verdone, chief marketing officer, Bank of America, in a statement. “The upfronts, a long-serving and valuable marketplace, are no exception.”
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Many advertisers have in recent weeks clawed back previous TV advertising commitments and told TV networks they intend to delay new purchases until the fall. Movie studios, retailers, travel advertisers and automotive marketers are among those who have been affected. In a new paper, the ANA has called for a delay in 2020’s upfront “until greater marketplace information and clarity becomes available.” And the organization is pressing for the “upfront” to start a new “calendar year” process “with the typical negotiation window occurring in the fall or early winter timeframe.”
Behind the scenes, according to people familiar with the matter, advertisers and media buyers have tried for weeks to devise a new market, sensing that some chunk of TV’s advertising base could not take part as it might in normal times. But those talks have grown contentious, according to some of those people, with various parties making demands for a large number of business processes to change quickly, and in some discussions the number of items up for discussion has grown overwhelming, these people said. Some of the TV networks have made clear to their agency and advertisers counterparts that they already accommodate sponsors who have different buying needs.
The commercial-buying contretemps erupts as marketers have tried to seize the current economic climate to press the networks for significant rate cuts. Thanks to an influx of new direct-to-consumer advertising from companies like Wayfair and Warby Parker, demand for TV advertising rose last year, prompting marketers to agree to pay some of the highest CPM increases in recent memory. CPMs represent the cost of reaching a thousand viewers, a measure that is central to the industry’s annual “upfront” talks. NBC, CBS, ABC, Fox and the CW pushed for hikes of 13% or more in 2019.
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"TV" - Google News
June 10, 2020 at 09:17PM
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Madison Avenue Calls for Seismic Changes to TV’s Upfront Market - Variety
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