Advertisers survived the holiday whiplash of CES. They ran through the digital noise of the NewFronts. Now there’s only one more major tentpole event between today and the chic, cerulean glitz of Cannes.
We’re talkin’ upfronts, the ad industry’s annual dog-and-pony show where media buyers and TV networks plan out their advertising deals on upcoming programming. If advertisers agree to terms today—or up front—there could be a discount. (The rest of the inventory, of course, is left to the scatter market, where rates can change on a whim.)
This year, advertisers are projected to spend roughly $18.8 billion during the upfronts, or around one-third of total TV ad spending and about 17% of digital video spending, according to a 2023 eMarketer report.
Naturally, the upfronts have gone through the same technical transformation as the rest of the industry, and ad-supported streaming has continued to grow. Last year, about two-thirds of upfront spending was expected to be allocated to digital advertising, per eMarketer.
During the week of presentations this week, Netflix and YouTube will hold court, while legacy media companies like Warner Bros. Discovery, Disney, Fox, and NBCUniversal will continue to pitch their linear networks and streaming platforms alike. This year, Amazon will join the party for the first time, pitching Prime Video’s nascent ad tier. Expect champagne. We broke down some of the biggest trends to expect during the week below.
Upstream: It’s a tale as old as time during upfronts week. Linear audiences continue to shrink, while streaming audiences continue to grow. More specifically, ad-supported streaming has exploded in popularity, with Amazon Prime Video and Netflix leading the way.
The ad-supported expansion means there’s more streaming impressions for advertisers than ever, a welcome change from past years, where inventory scarcity meant higher prices, Dave Sederbaum, EVP and head of video investment at Dentsu, said. “The amount of available impressions to buy has just grown leaps and bounds,” he told Marketing Brew.
Since greater supply generally results in less expensive impressions, he said, “price is going to have to come down in order for partners to stay competitive and compete for those ad dollars.”
This upfronts season, “streaming investment is going to be a very high consideration set,” Ian Mullin, SVP of integrated investment at Havas Media Network, told Marketing Brew.
“There’s just a lot of the same out there right now,” he said. “We are really taking a deeper evaluation into partnerships and trying to find very clear differentiators that each make each one of these stand out amongst their competitive set.”
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With that all said, both Mullin and Sederbaum said not to count out the OG: linear TV. It’s still got news and live sports, with the NFL absolutely crushing live TV viewership. There’s immediate reach and the opportunity for the oft-mentioned water-cooler moments.
The shiny new toys: Typically, platforms have used the upfronts to tout new partnerships and technological capabilities. Interested in Shoppable inventory? NBCU and Amazon have it. What about clean rooms? They’re being pitched by both Roku and Disney. New capabilities can be interesting, but might be limited by scale and reach across the broader marketplace, Sederbaum said.
“The biggest challenge is making sure that you’re navigating the space to find what is scalable, and what you can look at across the entire marketplace, not just within a walled [garden],” he said.
For the first time, retail media networks, like those belonging to Walmart and Kroger, are expected to play a crucial role this year in negotiations, Business Insider reported, noting Disney’s partnership with Kroger, Best Buy’s deal with Roku, and more recently, NBCU’s partnership with Instacart and Walmart.
Measure for measure: Remember a few years ago, when the industry almost ditched Nielsen? The legacy measurement service’s accreditation snafu led to a surge of interest in alternative metrics. Today, the industry is still largely using Nielsen, and that isn’t likely to change anytime soon.
“We’ve been talking about measuring currencies, specifically for almost three years now, and I wouldn’t say there’s much clearer light at the end of the tunnel,” Mullin said.
Looming over it all is a bigger question about the viability of the upfronts in such a vastly different media landscape than when they were first dreamt up decades ago. Given the dynamism of digital advertising and the constant release of new programming, well, why commit the money…up front?
“That’s the literally multibillion-dollar question going into this marketplace,” Sederbaum said. “That is a conversation we need to have with our partners: What is the value exchange in order to commit those dollars up front as opposed to simply buying opportunistically through a platform? It’s an ongoing test. It’s never been tested to the degree it will be this year.”