- Ad spending on TV throughout the upfronts, when advertisers commit prematurely to spending a certain quantity with broadcasters, is predicted to decline 3.6% year-over-year to $18.64 billion amid a rocky economy and the continued embrace of cord-cutting, according to an Insider Intelligence forecast shared with Marketing Dive.
- Despite the slide, marketers still clearly value the perks of locking in deals ahead of time. About 30% of all TV ad spending for the 12 months will occur throughout the upfronts season, a portion that has grown over the past five years.
- Losses for traditional TV is also balanced out by stronger appetites in digital video and connected TV (CTV). Across the upfronts and NewFronts, spending on digital is forecast to grow 28% YoY to $12.48 billion and account for “well over half” of the upfront market.
Transition is one theme underpinning this 12 months’s upfronts season. Legacy players are shaking up strategy and even tapping out of the media-buying bonanza — perhaps for good — while fresh entrants like Netflix are pushing to get their CTV offerings off the bottom. A pandemic-accelerated shift to streaming and CTV continues to take hold, while conventional TV’s backward slide feels sharper in a rocky economy that has seen ad budgets tighten.
Measurement, one of essentially the most hotly contested industry topics, is welcoming more variety, though Nielsen’s promise of a “big data” currency will go unrealized in one other blow to the firm that only last month won back its Media Rating Council accreditation. Still, Nielsen stands because the leading currency for the 2023-24 season, per Insider Intelligence.
Even legacy players are putting digital within the highlight, with Insider Intelligence estimating the channel now makes up greater than half of an upfront market that has historically been dedicated to linear and broadcast buys. Overall spending on digital is about two-thirds the scale of the standard media pie. Last 12 months, it was about half the scale, underpinning a quick expansion. Meanwhile, more of digital transacting has centered across the upfronts. Advertisers will commit 14.8% of their digital video budgets throughout the upfronts/NewFronts period this 12 months, with that number forecast to jump to 16.9% in 2024.
“The 2023 Upfronts might be more digital and more programmatic than past events, with digital-first newcomers like Netflix expected to make an enormous splash,” said Insider Intelligence principal analyst Paul Verna, the writer of the report, in a press release.
CTV stays a growth driver despite being a relatively immature channel loaded with measurement and frequency challenges. Insider Intelligence believes brands will commit $8.66 billion to CTV ads for the present upfronts. On the platform side, Netflix and Disney+ have launched ad-supported tiers in recent months. YouTube also continues to see its CTV bets garner traction with the addition of marquee programming like NFL Sunday Ticket. When factoring in YouTube, 87.2% of CTV ad spending within the U.S. is programmatic, according to Insider Intelligence.
With major platform and media-consumption shifts underway, the upfronts might be a buyer’s market this 12 months, Insider Intelligence said. Some of the largest demands from brands might be around flexible contracts and fluidity in budget allocations versus the outright cancellation of buys.
“Expect soft price increases (if any) and more flexibility of contract terms for advertisers,” said Verna. “Instead of specializing in price, networks are likely to make a play for volume, looking for the most important budget commitments possible.”
Looming over the upfronts is the WGA strike, which has halted production and impacted some first-look and overall deals at major studios. Uncertainty stemming from the strike could further support the concept advertisers are gunning for flexibility at a time limit after they’re already being more deliberate with their dollars.
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