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Upfront Notebook: Early Registrations Defy Trends

Advertising sales executives at different networks are getting different signals about how strong the upfront market is going to be from the big media buying agencies.

The agencies are trying to tap the brakes on what is expected to be a much stronger market than last year. But even in a strong market, some networks will be winners, others will be losers.

More than half of the big media buying agencies have registered budgets networks, which means they’ve provided the networks with a first draft of how much their clients plan to spend at that network.

But that early picture is muddy. One network exec said the money is about what they expected. Another said it was slightly lower than expected, but still up. Yet another said it was significantly lower than last year. Another source saw a mixed bag, with some up and some down.

It was not clear whether the agencies that had not registered yet were trying to get the networks to be less aggressive by making them sweat or if there were issues in getting spending plans locked in with the agencies having so many new, large clients after last year’s tidal wave of account switches.

In the past few years, network executives have complained that the agencies have low-balled their registrations, hoping to disguise how much money they planned to spend in order to make demand seem weaker. Some of that might be going on again this year, network executives said.

Media buyers said they were resisting suggestions that prices will increase by double-digit rates in this upfront. Last year, prices went up by low- to mid-single digits. Some network sales executives were signaling that prices could reach into the mid-teens.

Some buyers hope that by slowing down the market, they can blunt its strength. One buyer said the state of the market was “early dialogue,” noting that the market could drag a bit.

But some sales execs seemed to think it was entirely possible big deals could get done as early as next week. One realistic-sounding sales exec expects pricing to be just below 10% for the top networks, and volume to be flat to up 2%.

Some of the market’s strength comes from high prices the last few quarters in scatter. If that money moves into the upfront, it might raise pricing now, but it could weaken the scatter market, which means that at the end of the year, the network might not be any better off. The networks are also counting on money coming from digital because marketers have been disappointed with the returns on some online advertising vehicles.

Different networks will fare differently, depending on their ratings trends, the new programming they’re presenting and their ability to demonstrate that they reach and persuade target audiences.

Advertisers might also be looking to create skinnier bundles of networks to buy advertising from. One network exec said that agencies and clients don’t want to buy 10 networks deep anymore, but will spend the same money on fewer networks to gain leverage and take advantage of data and branded-content opportunities.

“Supply in terms of gross ratings points is down, but demand is still there. It’s just more selective,” the network exec said.

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.