As upfronts begin, advertisers hedge bets on TV ads

Adam Allington May 11, 2015
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As upfronts begin, advertisers hedge bets on TV ads

Adam Allington May 11, 2015
HTML EMBED:
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Throughout this week, network TV executives and advertisers will be meeting in Manhattan to hash out deals for some $20 billion of TV ads for the upcoming year.  People in the business call these meetings the “upfronts.” There’s a lot of showmanship. Univision’s presentation on Tuesday features a panel that includes Bill Clinton and a performance by Ricky Martin.

At one time, about three-fourths of all TV ads were booked during the upfronts.  But as with most aspects of media these days, this is no longer the case.

Jon Steinlauf is president of ad Sales for Scripps Networks, which produces shows like House Hunters and Chopped.  He says access to more and more consumer data means advertisers are more strategic with their investments. 

“Is it better to make decisions early and get the cost savings that go along with it?” he said. “Or are we better off holding our money and making that decision closer and closer to air?”

Today’s ad buyers want both the broad reach of television and the flexibility of the internet. Steinlauf says the upfront still accounts for half of all Scripps’ ad sales. 

And while TV viewership has been dropping for years now, the market for content is actually bigger than ever.

“We have to bear in mind that the definitions are very very much changing in the TV landscape,” said Macquarie Media analyst Tim Nollen.

Even though the upfront may be shrinking, the news is not all bad for the networks. Nollen points to the dramatic growth of mobile apps and DVRs in creating additional platforms to sell advertising.  

“How often do you see people sitting on a train, watching TV on their phone? Which was impossible to do even a few years ago,” he says. “So, it’s just about everyone trying to grab pieces of that larger pie now.”

Nollen notes that Nielsen ratings are still the metric used for assigning a dollar value to TV ads. However, the company is also looking at new ways to track eyeballs on things like digital ads for mobile aps.

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