Each spring’s upfronts are a major occasion on the American advertising calendar, but they have not escaped the disruption which is impacting the broader media ecosystem, as WARC’s Cathy Taylor explains in introducing the latest US Spotlight report.
This article is part of the May 2023 Spotlight US series, ‘The upfronts – what they mean in 2023’ Read more
Since WARC subscribers span the globe, and as many American marketers (especially among younger industry demographics) aren’t all that familiar with the basics of the upfronts, let’s first explain what they are. Then we’ll get into why they are still a vital driver determining how much of the high-value advertising inventory is bought and sold in the US, based on perspectives from this Spotlight report’s expert contributors.
Where the upfronts came from
First, it’s entirely within reason to question why so much money – last year’s upfront take was around $20bn – is centered around a fairly old-fashioned way of doing business In what is now usually a real-time world.
The upfronts began in 1962, when ABC (now owned by Disney), the then-laggard of what used to be the ‘Big Three’ US broadcast networks, began focusing the launch of its new TV programming on one week in the fall to build excitement for new shows. Not coincidentally, this was – and still is – when most car companies launch their new models, supported by huge brand awareness campaigns with even bigger budgets.
NBC and CBS soon joined in, and within a few years, they, too, were launching their new TV schedules in the fall. But the cycle really began in the spring, when the networks courted brands and agencies with glitzy, star-studded presentations (and parties! lots of parties!) in New York to promote their upcoming slate of new shows.
With varying degrees of speed in the weeks following those presentations – often dependent on the state of the economy – buyers would commit a certain amount of money upfront for the coming TV season. (When the industry uses the term ‘upfronts’, it refers to both the presentations, and the upfront buying marketplace that follows.)
This arrangement ensured that sellers locked in revenue early, and that brands could rest assured that their advertising for the coming TV season would have visibility. And, in a slower- moving, mass-media age, it worked pretty well.
Indeed, as the ‘Mad Men’ era came into full swing, this became the predominant model for TV ad buying. It’s probably clear that while one would like to think this buying process was based purely on hard ratings science, the reality was also based on no small amount of intangible relationships, and the allure of star power.
Media buying across several ‘fronts’
This way of doing business continues (somewhat) to this day, even though there is more data than ever on which to base buying decisions. In fact, the upfronts have grown – or metastasized, depending on one’s point of view – in multiple directions.
Now, in addition to the more traditional upfront presentations that will be held during the course of this week by NBC, Disney and others, there have already been a raft of presentations focused on different channels and content verticals: the PlayFronts, focused on gaming; the Podcast Upfronts; the SheFronts, focused on female representation in media; and the NewFronts, focused on digital content.
And famous faces still matter. Attendees at some of last year’s upfront presentations might have seen Lizzo, Sylvester Stallone and Dwayne ‘The Rock’ Johnson. The annual upfronts monologue from ABC late-night host Jimmy Kimmel, tailored to the brands and agencies who are being courted, has become an upfront staple, too.
The celebrity machinery for this year has, similarly, been gearing up over the last few weeks. The former late night host Conan O’Brien, who signed a $150m podcasting deal with SiriusXM last year, appeared earlier this month at the Podcast Upfronts, for example, while Harry Connick Jr. and J Balvin could be spotted at the NewFronts.
How the upfronts grapple with diversity
Increasingly, the upfronts are equally focused on putting diversity on center stage. Late April’s morning-long SheFronts, sponsored by the Association of National Advertisers’ (ANA) SeeHer division, served as a pep rally for all things female in the media and marketing ecosystem, with women producers, writers, technologists and advertisers from companies including Roku, Warner Bros. Discovery, Google, L’Oréal and the WNBA taking the stage.
One of the few men to speak was Procter & Gamble Chief Brand Officer Marc Pritchard, who – in his role as a co-chair of SeeHer – closed out the event. He noted the still-untapped opportunity contained within the $31.5tn women’s market.
“The best way to grow is to grow the entire market,” he said. “Make the market bigger. That’s the habit we need to get into. And that’s the beauty of what SeeHer has opened up for us: the ability to think about markets expansively.”
The Interactive Advertising Bureau (IAB), which runs the NewFronts, similarly showcased diversely owned media companies as part of its Inclusion Institute, with platforms including Blavity, Mecenas Media, Mirror Digital and Urban One being part of the program. There were also sessions from major Hispanic media brands including TelevisaUnivision and Canela Media, and the LGBTQ+ media company Revry.
The more things change…
At last year’s upfronts, where Kimmel had to tell jokes via satellite because he had Covid, he really got to the heart of what makes the current video advertising landscape both so interesting, and so perplexing.
“There are many who say network television is dying. I’m not so optimistic,” he quipped. “And yet, somehow, even though ratings are down, ad spending for broadcast television was up 37 percent the first quarter of this year. How is that possible? The more viewers we lose, the more money you give us. What kind of message is this sending?”
The underlying message is this: that despite streaming, TikTok, AVOD, FAST, ad-supported Netflix, smart TVs and YouTube, many major TV advertisers still have to wrestle with scarcity, because there are still only so many premium advertising avails that will give them the reach and frequency most of them seek.
And, despite vast increases in total advertising inventory, more of it has to be bought to reach people in the same numbers that used to be possible with one popular TV show. Our Spotlight authors put this reality in context.
As Shelby Saville, Chief Investment Officer of Publicis Media, notes in her article for the report: “Usually, the need to secure this [inventory] annually is driven by the fact that if you wait, you may not be able to access it later in the year. Buying annually enables brands to lock in access plus the price of that inventory.”
Many media industry executives, including Saville, argue that, although the need to secure inventory early and often will persist, the upfronts should be increasingly complemented with mechanisms for providing ‘always-on’ value in media marketplaces to clients as well.
It’s the economy, stupid – but not just the economy
As the industry ponders that kind of evolution, there is one factor baked into this year’s upfront that is expected to slow activity down: and that’s the up, down and sideways nature of the current economy. According to a February survey from research firm Advertiser Perceptions, less than half of US advertiser budgets will go to upfront buys this year, which is a 7% decline from the 56% of budgets that went to upfront buying in 2022.
“With the economy somewhat cool and consumers cautious about spending, advertisers are shifting their budgets, and prioritizing flexibility,” explains Erin Firneno, Advertiser Perceptions’ VP, Market Intelligence, in this story.
But, Firneno notes, there’s another factor roiling this year’s upfront, and that’s the continuing uncertainty surrounding the “currency” used for measurement and transactions.
How currency is changing the upfront game
The debate over currency – defined as “the financial unit of value for buying and selling TV ads based on measurement data” – has been going on for some years, as the hegemony of Nielsen has slowly eroded because of new viewing habits, platforms and measurement solutions.
Nielsen remains the only currency accredited by the Media Ratings Council, an industry body focused on media measurement, but that is making less and less difference to the industry in practice.
As WARC’s Stephen Whiteside writes in this article, a Joint Industry Committee (JIC), which launched in January, is moving forward, “with the objective of enabling multiple currencies for transacting on ‘premium’ and ‘long-form’ video content before next year’s TV upfronts,” as attendees heard at the Advertising Research Foundation’s (ARF) AUDIENCExSCIENCE conference.
Notably, Nielsen has not signed on to the JIC – citing concerns over requirements that may favor its competitors – but many of the major players in the media ecosystem have, including GroupM, NBCUniversal, Roku and the Association of National Advertisers (ANA).
The multi-currency future
If the multiple currency upfront happens next year, it won’t be like flipping a switch. The process has already begun, with currency solutions from players including iSpot.tv, Comscore, VideoAmp and Samba TV making inroads. Accreditation be damned!
In a presentation at AUDIENCExSCIENCE, JIC member Warner Bros. Discovery detailed how it’s moving forward with exploring and refining alternative currencies. The cross-platform media giant conducted a proof of concept test across several providers and has selected Comscore and VideoAmp to enable alternative currency transactions across its linear inventory and digital “‘advanced advertising solutions’ for the 2023/24 upfronts,” according to this article.
Similarly, at the NewFronts, Amazon explained that it was partnering with VideoAmp and iSpot.tv to track cross-screen impressions and reach for the National Football League’s (NFL) ‘Thursday Night Football’, according to this story from WARC’s Maya Yegorova. It is coming to terms with the evolving landscape in measurement and currency in a similar way to Warner Bros. Discovery and other competitors: namely, by transacting buys this year with Nielsen’s data, while giving advertisers the option of using iSpot or VideoAmp next year.
For those needing more guidance, this Spotlight also includes the recent 4A’s report, ‘Currency Conundrum Meets Measurement Mayhem This Spring – Are You Ready?’.
It all speaks to the profound changes in viewing habits that are finally being reckoned with by brands, agencies and media partners. In this article advocating a measurement switch to “TV-accessible households” from “TV households”, ARF Chief Research Officer Paul Donato, explains, “One of the greatest needs in the industry today is for comprehensive cross-platform measurement.
“Ad buyers might know which platform their ad ran on, but not the channel, network or program, which impacts media planning and reporting.”
The need to embrace all of this change, from diversity to measurement to platforms, is ongoing; it won’t stop when the upfronts for this year are over. But the fact is that the upfronts have evolved into an annual moment in time that brings clarity and focus to lingering issues, and amplifies discussions around how the industry goes about assessing and buying media.
To that extent, the upfronts continue to prove their worth.
Read more in this Spotlight series
The upfronts aren’t what they used to be – and that’s a good thing
There is a lot of television being watched without television sets, and it needs to be accurately measured
Advertising Research Foundation
Warner Bros. Discovery looks to bring alternative currencies to the upfronts
How a cross-discipline Joint Industry Committee could transform US video measurement
How brands and media agencies can prepare for the measurement and currency conundrum at the 2023 upfronts
What to expect in this year’s upfront
Why an always-on mindset is good for upfront strategy
Publicis Media US