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2016: Return of the Upfronts?

May 18th, 2016   ||    by Melanie Brown

Since 2014, a soft TV market has had the media industry widely predicting the demise of the cable network upfronts. But the upfronts have always been a futures market, and the current strength of the scatter market moving into the upfront season indicates that prices will be up significantly as opposed to this time last year.

Less Time, Higher Costs

According to Ad Age, the double-digit percentage increase in ad pricing in Q4 2015 and Q1 2016 has several TV ad executives putting the upfront market as one of the most lucrative in recent memory. With scatter pricing high after a soft 2015 upfront, and the added hurdle of reduction in ad time, noted by Bloomberg, advertising space is more scarce, and therefore more expensive.

Seems like a long way from the death of TV advertising that all those doomsday-talking heads predicted over the last couple of years. The blame has been placed on everything from digital media spend to low ratings and time-shifted viewing, but it looks like the advertising industry will do just fine.

For now, linear television remains the broadest, most powerful way to reach audiences, and that’s poised to stay the case for many years, according to a recent research note by analyst Brian Wieser.

Data Revolution

It’s important for TV advertisers to go into this year’s comparatively strong upfront season knowing that smart buyers will use a well-strategized upfront buy in combination with support from the scatter market throughout the season. The factors that came into play to contribute to the market’s fortitude at the end of 2015 are now trickling into the upfront market, but prices aren’t the only thing we’ll see carrying over.

Over the past couple of years, the soft market gave way to a boom in programmatic TV platforms. Programmatic TV companies have been swooping in left and right to create demand for linear inventory outside of the traditional upfront buys in ways the industry hadn’t really seen before—and networks have started to understand.

At this year’s upfronts, the programmatic craze isn’t just for platforms anymore. The data-driven revolution is finally permeating the network upfronts. This year, Fox, NBCUniversal, and Viacom are all getting in on the programmatic action, and touting their data-driven audience targeting products.

It looks like the upfronts are back, and they’ve received a bit of an upgrade.

To learn more about complementing an upfront buy with a data-driven scatter buy, contact Videa.

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