Media Buying Briefing: Buyers insist they ‘can’t let this happen again’ after an insane upfront

By Michael Bürgi

The $20 billion television upfront marketplace has wrapped up the negotiation phase, with the major broadcast network owners walking away with dramatically increased prices for their linear ad inventory, according to media buyers at several major agencies, most of whom spoke with Digiday on condition of anonymity.

Viacom/CBS, the last of the major TV players to finish negotiations, held out longer than its competitors and secured cost-per-thousand viewer (CPM) increases in the 22-25 percent range for its prime-time ad inventory over last year’s rates, buyers told Digiday.

The main reason Viacom/CBS outpaced rivals NBC Universal, Fox and Disney in CPM increases is that buyers couldn’t place all the dollars their clients asked them to secure on those other networks — putting Viacom/CBS in the position of getting what its sales folk asked for. Possibly at the expense of relationships with the buying side.

“You might say, that is good [for CBS] due to supply constraints in linear, but you don’t know how their stance impacted their digital dollars and future relationships with advertisers,” said one buyer. “I can say for us, it had and will have great impact.”

Buyers largely acknowledged this is the most insane market they have experienced in their careers. And networks take heed: when buyers talk about impact, they mean they don’t plan to let this happen again.

“We’re starting to explore other options for 2022,” said another buyer. “We can’t let this happen again.”

“I believe many clients will see the rates of change (ROC) being settled on in the upfront and will decide that they are not willing to do business in this way,” said the first buyer. “They will understand the ROI is no longer there for them and decide to either cut and/or move money to cheaper alternatives across all media types.”

That will likely start to happen in the scatter marketplace, which includes all ad inventory not sold in the upfront as well as inventory that’s been put aside for makegoods (when networks have to return either ad time or dollars back to buyers due to ratings shortfalls — one of the major contributors to limiting networks’ inventory because ratings on linear TV have fallen precipitously). Scatter starts with fourth-quarter 2021 inventory that network sales execs start selling in September.

Early forecasts suggested scatter CPMs could rise as much as 40-50 percent over upfront rates, but buyers don’t yet have a clear sense yet, much less of first, second and third quarter 2022 inventory. Fourth-quarter is complicated by the holiday selling season, which commands its own type of demand. And then first quarter of 2022 includes the Winter Olympics and the Super Bowl, which also eat up ad dollars and inventory.

They do know they plan to take as hard a line as possible on pricing. Factors that could work in buyers’ favor:

By August, buyers will have sat with their clients to go over the upfront ad commitments they made. When clients see the sticker shock buyers expect they will experience, it is possible …read more
Source:: Digiday

Author: Aaron