An excuse for networks to gather TV’s biggest and brightest stars for lavish parties? Or an opportunity to secure the best TV inventory for the coming year? Upfronts is an annual tradition, and possibly the last bastion of old TV – paying for reach and reach alone.
But, TV is no longer just about reach. It’s also about response, especially when it comes to using TV to activate audiences in the digital ecosystem. With the new age of TV, can upfronts keep pace and allow for the flexibility and in-flight changes needed to ensure ads reach their full, measureable potential?
The last bastion of old TV buying
Almost $20bn was sold at upfronts in 2017, and with TV ad spend due to increase 2.3% this year, many advertisers believe this buying period is the only opportunity to secure the best deals. TV ad buying has evolved however, and upfronts have yet to catch up.
Upfronts allow advertisers to negotiate deals against premium inventory, locking in buys as well as agreed-upon audience reach (primarily based on ratings). This is a very prescribed approach, which is no longer realistic in today’s fast-changing world. While an advertiser can buy, say, 10 million viewers or “eyeballs” for every time its spot airs, it doesn’t mean that audience will respond. Advertisers are used to digital’s fluidity to react to topical situations and adjust plans depending on real results. And this type of flexibility is possible with many TV buys too – but not with upfronts. Being locked into upfront deals means it’s almost impossible for TV advertisers to be nimble.
While more flexible buying methods do exist, they don’t carry the same gravitas as upfronts. Typically, these type of buys are thought of as long-tail inventory in the TV world. For example, scatter allows advertisers to purchase ads on a quarterly basis, while clearance provides weekly purchase options. Contrary to popular belief, both mean decisions can be made and adjusted as a campaign runs, and aligned closely with other dynamic channels, such as digital.
Innovating TV’s possibilities
In an age where channels such as social media and digital out of home provide advertisers opportunities to engage with consumers, TV was forced to evolve. Networks have been working hard to revitalise TV’s offering – which is viewed not as a siloed channel, but as a primary driver of digital response.
To adapt, the industry has tried to take a cue from digital. New TV ad formats have been developed that offer shorter, more engaging options to communicate with target audiences; think Fox’s six-second ads debut last year. The link between TV and digital is also being leveraged. For example, TV, when used with search, offers a multi-pronged strategy that ties in the reach that TV offers, with the direct response of digital. Better targeting capabilities are also being offered. The rise of data-driven technologies means TV targeting is based on more than just age or gender. Advertisers can drill down to specific audience segments that will actually respond to TV ads.
How to make-good on upfronts
To bridge the gap between the structure of upfronts – where reach is prioritised over response – and ongoing innovation within TV, advertisers can utilise make-goods. These are supplementary inventory, spot ADUs (audience deficiency units), to “top up” where reality doesn’t reach expectation. Imagine you’ve made upfront buys for a full season of NCIS, where the value has been determined by assumed popularity. You are guaranteed 12 million viewers each week. Throughout the season episode ratings are released, confirming those audience numbers. A few weeks in, the ratings are not quite what was expected, with viewership dropping to 10 million. Make-goods are then used to bring your brand’s exposure up to the promised level, so the network offers you inventory that will get you in front of 2 million more “eyeballs”.
Make-goods are the part of upfronts that allow for flexibility and control. But where advertisers falter is that they view them as throwaway inventory and passively accept whatever the network offers. Instead, brands should think of them as inventory that will bring value to the business.
In the event of a make-good, your brand should know exactly the best inventory for performance, which can be understood through continuous measurement. Using the NCIS example, the network might present you with a make-good for The Young and the Restless. But your data analysis might show you that Survivor in the evening, and CBS This Morning on Wednesdays perform best and will drive the most response for your brand. Armed with that information, you can then optimise your make-good for performance.
It’s the power of TV that keeps advertisers coming back to upfronts, but the event needs to evolve to accommodate advertisers that treat TV as a performance-based marketing channel. Only by holding TV accountable can the ROI potential for campaigns be understood and acted upon. Advertisers must recognise the role upfronts play in the greater TV ad buying landscape, as well as the other opportunities available, but no matter how inventory is brought, it is essential for advertisers to continuously measure impact and optimise their spend.
Kevin O'Reilly is chief strategy officer at TVSquared