Network advertising sales executives are upbeat because, despite cord-cutting and falling ratings, they say demand for TV remains strong enough to continue to push prices significantly higher.
This week, the biggest TV companies will mount their annual upfront presentations, taking over major theaters to showcase their new schedules and tell advertisers about the data, scale and integrations that should persuade them to buy TV in the upfront marketplace rather than move marketing dollars to digital.
Drinks will flow, bands will play and shrimp will be consumed. Jimmy Kimmel and Kenny Mayne will tell jokes. It will be hard to believe all those stories about TV being in an irreversible decline.
“I think it’s going to be a healthy market,” Disney advertising sales president Rita Ferro said. “When you look at our scatter business right now heading into the second quarter, across the board on both television and digital, it’s healthy. The pricing continues to be significantly higher than the previous year’s upfront and I think there’s significant continued demand for television opportunities.”
Linda Yaccarino, chairman of ad sales and client partnerships said that the TV ad business is changing in ways that are starting to fuel the business.
“Data-driven decision making is absolutely taking a scaled foothold,” Yaccarino said. “Now that TV is smarter and companies like NBCUniversal can guarantee on results – this changes the conversation completely.”
Yaccarino noted that some advertisers invested too much in digital and social and are now coming back to TV.
“There are new segments maturing, which is feeding the premium content space, whether it’s businesses in the tech category or in the exploding direct-to-consumer space. DTC businesses are topping out on performance-based marketing vehicles and they have to transcend the feed completely and move to where it’s going to give a long-lasting effect, which is on TV and next to premium content.”
Many of the networks have new stories to tell about themselves.
For The Walt Disney Co., it’s a story of additional scale with the consolidation of ESPN’s ad sales and addition of 21st Century Fox properties such as FX and National Geographic. Disney also will be talking about how all of its assets can be accessed using one front door and one technology stack.
Size is also important to NBCUniversal. “The idea of scale has become more and more important,” said Mark Marshall, president of ad sales and client partnerships. “It’s getting harder and harder for an advertiser to find immediate reach so we’re trying to work with advertisers to really articulate the value of the portfolio to drive immediate impact.”
Results matter, too. NBCU is looking to measure and guarantee the business outcomes of its campaigns.
Fox, meanwhile, is pushing the idea that smaller can be good. After most of 21st Century Fox was sold to Disney, the new Fox consists of the broadcast network, Fox News and Fox Sports. “We’re well-positioned to be experts in the areas we’re focused on,” said Suzanne Sullivan, executive VP, entertainment ad sales..
For CBS, the message is continued stability despite the departure of chairman and CEO Les Moonves. “We’re going to be very collaborative with our clients and I expect that we’re going to have a very good and strong upfront,” Jo Ann Ross, president and chief advertising revenue officer, said. “Clients are going to be happy with their results.”
NBCUniversal (Monday Morning, May 13)
The NBCUniversal upfront will be a celebration of advertising. “What we’re trying to do is make the consumer experience better for our viewers and the ads work harder,” Marshall said.
One way to do that it to cut commercial clutter and one tool NBCU had is Prime Pods, one-minute commercial breaks that appeared in the company’s top 50 shows. As research showing how well Prime Pods delivered lifts in client marketing goals, demand grew, said Laura Molen, president, ad sales and client partnerships at NBCU.
The Prime Pods turned out to be unexpectedly good at driving web searches. On Oct. 2, the film A Star Is Born was featured in a Prime Pod during This Is Us. Starring Bradley Cooper and Lady Gaga, the film was already well known, but in the five minutes after the ad ran, 145,000 people searched for A Star Is Born.
This year, NBCU will put Prime Pods in more shows, including news and late-night programs. In some reality competition shows, it might put the Prime Pod at the end of the show when results are revealed, instead of in the program’s first break.
NBC will also be looking at a low-commercial-load format for A Little Late with Lilly Singh, its new late-night show hosted by the YouTube star.
NBCU is one of the most aggressive companies in trying to switch clients from buying based on broad demos to buying targeted audiences. “Right now, second quarter is our biggest quarter ever in terms of audience buying through our AdSmart products,” Marshall said. “We think it will continue to be a big part of the negotiations this year as more advertisers become more sophisticated with their buying.”
The company also recently introduced ShoppableTV, which lets clients sell products directly to NBCU viewers via on-screen cues that can be read by smartphones.
“We are excited to work with marketers in the upfront and outside the upfront with these new shoppable tools,” Molen said. “It’s really exciting for us to be able to take a QR code and help lift a marketer’s sales in a live moment.”
NBCU will be launching its over-the-top streaming service next year and it will be mentioned during the presentation. But ad sales won’t start in earnest till next year.
New programming will also be shown, so NBCU will have a lot of ground to cover.
Marshall said that during a run-through, the presentation clicked in at 94 minutes, but that Yaccarino was determined to cut it by four more minutes.
Fox (Monday Afternoon)
New Fox has been describing itself to advertisers during entertainment and sports roadshows over the last six months.
What’s in it for advertisers? “The quality audiences and quality content that we can provide them,” Sullivan said. “We are really very focused on creating ad environments that work really well for brands. That’s what our ad innovation is founded on, creating opportunities where their brands can really break through and reach the audience.”
This year, Fox is adding WWE SmackDown on Friday nights (it moves from Tuesdays on NBCU’s USA Network) as it ratchets up its live sports and event programming. With NFL football on Thursday nights and Sunday afternoons, college football and the World Series, Fox asserts a certain amount of dominance in the fourth quarter. With so much sports, ad availabilities in the entertainment content being spearheaded by new Fox Entertainment head Charlie Collier are more scarce.
“Scarcity is our friend,” Sullivan said. “I think it makes us [advertisers’] first phone call.”
Sports will also create two big opportunities for Fox’s entertainment programming, with time slots available after the NFC Championship Game and Super Bowl LIV.
Fox will be jazzing up its JAZ pods, short ad breaks that ran during the network’s Sunday-night animation block and The Orville as part of a clutter-busting strategy. This season, Fox will be selling Fast Break pods, which will have 60 seconds’ worth of commercials and can appear in any Fox show, depending on advertiser demand.
Fox is also rolling out what it calls Prediction Pods, which use the social-media conversations around shows to encourage viewers to participate in real time.
Disney (Tuesday Afternoon)
Disney’s upfront could no longer be contained by a single theater. In addition to Lincoln Center’s David Geffen Hall, some of the presentation will originate from the center’s Alice Tully Hall as well.
“We have a much bigger portfolio,” Ferro said. “It’s bigger and better.” Disney has been showing off assets in a series of roadshows, but its upfront presentation will distill them and emphasize their strongest points.
While the spotlight will be on Disney’s storytelling, Ferro will also talk about audience-based buying and linear optimized opportunities, and how clients will be able to access them.
“They wanted one front door with one technology stack to enable the ability to target audiences across the best content across the company, and that’s really what we’re focused on,” she said.
Advertisers are also looking to do integrations and other forms of branded content. To do that right, Disney has decentralized its creative services capabilities, so its content creators can work more closely with brands to craft more seamless and organic stories.
As an example, Novo Nordisk, which makes a diabetes drug, worked with ABC on an episode of Black-ish that dealt with the disease. “Data is important to advertisers, but they want to be closer to the content in real time,” Ferro said.
Disney networks are ramping up the use of live commercials,
especially in sports, split-screen ads during events such as Dick Clark’s New Year’s Rockin’ Eve and, on the digital side, vertical ads that reveal themselves as the user scrolls through content. But ABC will not be changing its commercial load.
Disney has been condensing its presentation and is hoping to get it down to 90 minutes, including special surprises and a musical performance. Two wild cards could be ESPN’s Kenny Mayne, who provided comic relief at past ESPN upfronts and will now deliver a halftime report at ABC’s event, and ABC late-night star Jimmy Kimmel, who roasts media buyers, rival networks and especially ABC during his upfront appearances.
“They could both go on for 45 minutes and I think clients would be thrilled to watch them,” Ferro said. “This is going to be a great show.”
With all of the new moving parts, Ferro said Disney’s upfront negotiations might move a little more slowly this year. “We have to make sure that everything we need to take care of is done thoughtfully,” she said. With the company launching its high-profile streaming service Disney+ in the fourth quarter, as well as a couple of high profile movies, year-end inventory will be tight. “I think people will move their money in the upfront to make sure they have the inventory they need,” she said.
CBS (Wednesday Afternoon)
CBS will be returning to Carnegie Hall, but longtime chief programmer and head cheerleader Moonves won’t be there, after he lost a battle with CBS’s controlling shareholder, Shari Redstone, and was accused of sexual harassment by several women in the business.
Under Moonves, CBS held the title of most-watched network for more than a dozen years. Ross said there’s no reason to expect anything different next year.
“The schedule was always very collaborative,” she said, pointing out that the network’s top development and scheduling executives remain in place. On top of that, David Nevins, CBS’s new chief creative officer, launched several hit shows while also running the Showtime premium channel. “I’m fully confident that we will be putting up a schedule that will have hits on it,” she said.
CBS’s sales team has not changed, providing stability at a time when other networks are merging and reorganizing.
Ross said she’s had many conversations with clients that revolved around how to use data to better target their advertising.
CBS has moved more cautiously toward audience-based buying than some of its rivals.
“A lot of clients don’t want to share their first-party data,” Ross said. “It’s not one size fits all and there’s no silver bullet in terms of interpreting the data. Each client has different attribution models and each client devines an outcome differently.”
CBS has long used data to help clients identify which shows their customers watch, and if clients see audience buying as a way to make their advertising more efficient, CBS is willing to play. “It’s a game that we want to be in, but we also want to serve the broadcast audience,” Ross said. “The best of both worlds.”
The CW, owned by CBS and WarnerMedia, presents its new schedule Thursday morning.
