Media Buying Briefing: Early movers buy upfront at single-digit rate increases as sellers accommodate on ‘options’

By Michael Bürgi

The $20-billion (give or take a few billion dollars) TV upfront marketplace quietly registered a significant portion of business in the last several days, in an orderly fashion that represents a 180-degree turnaround from last year’s chaotic market.

And it’s largely benefitted the media buyers representing their clients’ money, as pricing has been about half the rate of increase seen last year.

Thanks in large part to flexibility from the major sellers (NBC Universal, Disney, Paramount/CBS, Fox and Warner Bros/Discovery) in regards to letting clients cancel or amend their upfront orders closer to when the advertising will actually run (known as “options”), the major holding-company media buying organizations are said to have wrapped (or will wrap this week) most of their deals, agreed several buyers, many of whom spoke on condition of anonymity due to the sensitivity of negotiations.

GroupM, Publicis Media, Omnicom Media Group, and IPG/Magna are said to be the most active media agencies, as is the largest independent buyer, Horizon Media. Early movers in the market secured better pricing than those entering negotiations now.

“It helps to be negotiating 365 days of the year,” said Geoffrey Calabrese, chief investment officer for Omnicom Media Group (OMG), who declined to address any specific deals. “So when we get to the upfront season, we’re ready to go. But added flexibility by [media] partners has also been a tremendous help. And sellers that provide greater flexibility should be rewarded for that.”

NBCU and Disney are said to be furthest along in completing deals, generally at pricing levels that are in single-digit percentages over last year’s rates, but in cases inching up to 12 percent over ’21 rates. Depending on the buyer, CBS/Paramount and Fox were said to be at differing levels of completion — Fox is looking to secure upfront commitments for Super Bowl LVII in 2023. NBCU, Fox, Paramount and Disney all declined official comment but also didn’t deny that deals are being written.

Warner Bros/Discovery, which only came together as a cohesive ad sales operation in the last two months, has been hamstrung by setting overly ambitious pricing goals before the market started, agreed buyers, alongside its newness as one sales organization. “They came out really aggressively with the rate of change they were asking for,” said one media buyer. “Since we started negotiating with them, they’ve come around to more realistic expectations. But that’s left them as the last of the major [seller] groups to wrap up.” A WB/Discovery representative didn’t reply to a request for comment by deadline.

One rival network source pointed out that the company just hasn’t had the time to knit the back-office tech together it needs to provide comprehensive cross-platform sales opportunities.

Fox, meanwhile, has generally less ad inventory to sell than the other major sellers — and in this market that’s giving the company less leverage, said a buyer. “More limited partners still have the issue of supply loss based on ratings decline, and that’s a little bit of a …read more

Source:: Digiday