Why TV’s Upfront Advertising Sales Declined — Again

Aug 20, 2015  •  Post A Comment

The amount of advertising commitments the broadcast networks secured during the recent upfront market declined for the third consecutive year, according to Variety estimates, and the publication offers an explanation.

The networks don’t typically provide hard numbers for their upfront sales, but Variety says this year’s combined take for Fox, NBC, CBS, ABC and the CW was between $8.02 billion and $8.69 billion — down from an estimated $8.17 billion to $8.94 billion in 2014. All of the big four were down, with only the CW, among English-language broadcast nets, seeing its figures rise.

“If trends continue, ad commitments could dip below the $8 billion mark next year — the first time they would do so since recession-wracked 2009,” Variety notes.

The ascent of rival video platforms such as VOD and mobile is one obvious factor. As alternatives to traditional television gain traction, marketers have become more cautious about the upfront.

“Madison Avenue and TV appear to be entering into an on-again off-again relationship,” Variety says. “Advertisers still want to use TV, but they are trying to be coy about their intentions.”

But the report adds: “TV remains filled with commercials — indeed, some Wall Street analysts believe there are more ads on the air than ever, as TV networks run the same ones again and again in order to meet viewership guarantees while the consumer’s gaze migrates to the screens of mobile devices.”

Some TV ad campaigns, the report notes, continue to have an impact on the buying public.

However, the report notes that “at a time when marketers are trying to create experiences for consumers to which their ads can be attached in relevant fashion — think of a party weekend sponsored by Budweiser or a charitable event — advertisers would prefer to spend against specific initiatives as needed rather than committing millions of dollars in May for a program that may or may not run next March.”

That means more buying appears to be moving to the scatter market, with ad time selling closer to the air date.

The report quotes CBS Corp. CEO Leslie Moonves saying during the company’s recent call with analysts: “People are just waiting longer to make their buying choices. But right now, we’re seeing the scatter ad market accelerate rapidly in the third quarter with double-digit gains in pricing.”

Please click on the link near the top of this story to read Variety’s full analysis.

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