Upfronts season is a sight to behold. Networks and advertisers gather for tough negotiations and lavish parties with big-name entertainment. The end result lays the foundation of what we see during TV ad breaks over the next 12 months.
But the 2017 Upfronts felt different – and it had a lot to do with digital. To put it mildly, digital has had a rough go lately, with fraud, security and placement concerns dominating the headlines. Many advertisers expressed their disappointment with digital-first approaches and moved spend back to TV. It’s no surprise that networks stressed the “digital disadvantages” throughout the Upfronts in an effort to retain more ad dollars.
Despite the issues with digital, advertisers have grown accustomed to its advanced targeting, which is why audience targeting for TV was front and center this year. Fox, Viacom and Turner teamed up to create OpenAP, a system that will enable buyers to build targetable audience segments across networks. NBC announced it would sell $1 billion of its Upfront inventory, and A+E had similar plans.
What does the call for better targeting mean for the Upfronts – and the industry as a whole?
Not a TV-Only Discussion Anymore
To deliver the seamless experiences consumers want, advertisers are taking an increasingly holistic view of media. TV is now a part of a sophisticated mix – including display, social, VOD, OOH, print and more – where messages are tailored and joined up across channels.
The Upfronts are no longer TV-only. Advertisers want to know what assets networks can provide to help them achieve these type of seamless and impactful cross-channel media strategies.
Demand for Flexibility
At the heart of holistic media strategies is the ability to make on-the-fly changes to different aspects of the buy to improve response. With the Upfronts, advertisers are locked-in, and that can throw a wrench into media plans.
As the year goes on, and once the dust settles around this year’s Upfronts, it will be interesting to see if TV advertisers pursue more scatter and clearance buys to get the flexibility they demand.
These options let advertisers purchase ads slots on a quarterly (scatter) or weekly (clearance) basis. This means decisions can be made closer to broadcast dates, ensuring better alignment between TV ads and messages on other, more traditionally dynamic channels.
Data Reigns Supreme
Digital’s crown has slipped, but advertisers still value its measurement, targeting and optimization capabilities, and are demanding similar opportunities for TV. To meet these demands, networks are striving to provide deeper audience insight and tools that allow advertisers to purchase ad slots based on the specific viewers reached.
As a result, the focus of TV trading itself is moving toward improving the accuracy of ads to audience matching, as well as adjusting campaign elements, such as dayparts, programs and genres, in-flight.
Such data-fueled efficiency is set to be the biggest new feature of the Upfronts this season, though large-scale targeting perfection is still a way off. For now, the majority of ad buying still uses broad audience demographics, which means huge chunks of relevant segments are missed.
Say you want to target female viewers aged 20-30. With the existing system, the ad would be delivered to an audience where this demographic over-indexes the segment. For those that don’t fit the criteria, the ad is then mostly irrelevant. This is an issue the industry must address – we need a means of understanding who every viewer is and tailor ads accordingly. This is where addressable and programmatic TV comes in, but issues around legislation, inventory, data privacy and speed need to be remedied before they become viable options.
Upfronts have their faults: targeting is limited and deals are fixed, with advertisers locked in to set slots for the whole year. Even when clauses are broken, it’s likely that ads will simply be moved vs. cancelled. Just look at what happened with prime ad slots with Bill O’Reilly and Fox News.
But for all that, the Upfronts provide high-quality ad opportunities that assure their enduring appeal. What advertiser could resist first pick of premium, prime-time inventory and the chance to veto any competitor brands aiming to place ads in the same slot?
The Upfronts will not disappear any time soon – like TV, this tradition is too valuable and deeply rooted to be swept aside. But they will evolve. The ascent of data as the “King of the ‘17 Upfronts” is a sign of things to come. TV ad buying models of the future will be more precise, audience-focused and agile. That’s what advertisers want and, ultimately, the customer is always right.
Daniel Gulick is an Insights Engineer at TVSquared. He was formerly the Head of Analytics at the Cross Agency, where he managed performance reporting and analytics for the entire agency roster, which included a portfolio totaling $300M in annual ad spend.