Weak TV Ad Market Fuels Buyer Uncertainty As Upfronts Loom

The consensus among publishers and buyers is that the TV ad market has seen better days. However, no one would've guessed that those better days were during the height of the Covid-19 pandemic in 2020. “This is weaker than it was during Covid," Warner Bros. Discovery CEO David Zaslav said at an RBC conference last November, adding that "things got a lot worse" in 2022's final months. NBCUniversal CEO Jeff Shell didn't have a much cheerier outlook while speaking at a UBS conference a month later, speculating on the reasons behind the soft market: "It’s hard to figure out whether that’s because of macro-conditions—whether people’s businesses are worsening—or rather because people are just uncertain." According to media buyers, the answer is both, leading clients to take a wait-and-see approach in the early months of 2023. TV Ad Sales Chiefs and Buyers on How the Ad Market Changed in 2022 "The economy is in a situation where people are not confident in making long-term commitments or spending the way they had historically, either with concerns for the long-term economic issues or other needs that they have internally," said Stacey Stewart, U.S. chief marketplace officer, UM. "But there definitely is less spending in the marketplace across the board." And with clients skittish about long-term plans, that doesn't bode well for TV advertisers looking to lock in linear commitments with upfront negotiations looming in the coming months. "Clients may put pressure on both buy and sell side to hold off as long as possible so that they can see essentially what the future [holds] as late as they possibly can. So as close to fourth quarter as they can," said one buyer, speaking anonymously. "But sellers are continuing to push for earlier upfronts. That was kind of the message we were starting to see at CES." Potential CTV shifts With the current state of the economy, including high inflation and a possible recession on the horizon, CTV and digital opportunities are becoming even more enticing to media buyers this year. "If you're buying upfront right now, that's a really long time—you're putting your money in for a year. And obviously, you have options," said another buyer, speaking anonymously. "But with digital, you can put your money down a lot closer to when you want to spend it." Both CTV and linear need to focus on flexibility in the upfront, another buyer said, because going back to traditional TV terms could be detrimental for marketers. "If you're buying linear TV, client expectations are it's going to need to behave more like their digital counterpart. So that's CTV and not the other way. Because a partner could say we're gonna move to the TV terms—that will knock you out. That will almost go on a do not buy list," the first buyer said, referring to the inflexibility of traditional linear TV. Comcast Says It’s Found the Ideal Ad Spend Balance Between Linear and Streaming 'Cautiously optimistic' Despite the ad market’s uncertainty, not everyone echoed Zaslav’s weaker-than-Covid proclamations. For instance, Paramount CFO Naveen Chopra said late last year that “we don’t see anything close to” the softness Zaslav had cited. And GroupM's global end-of-year forecast predicted advertising will grow 5.9% in 2023, with strong gains in connected TV among other areas. Another buyer told Adweek they were "cautiously optimistic" about the second half of the year, as they expected only a mild recession, with the market rebounding following a soft first half. It's a notion that numerous media bosses, including Paramount CEO Bob Bakish, Shell and, yes, even Zaslav endorsed in their companies' first earnings calls of 2023. However, Shell added the caveat that macro conditions (like the war in Europe or Covid-19-related issues) could change that. Buyers noted that linear is still the most affordable way to get in front of a mass audience, offering down-to-the-episode transparency that CTV lacks. But if linear partners don't lean in on flexibility, the ad dollars moving to the Amazons and Rokus of the world won't come back. "My message to our media partners is don't get greedy [or] the money is going to migrate," the buyer said. From measurement to overall buys, 2023 is shaping up to be year for embracing change, with some marketers reevaluating the television ad market altogether. "I'm never looking at just TV unless a client is specifically insisting on it. I buy video. It doesn't matter to me what screen it's on," said Amy Ginsberg, chief investment officer, Havas Media Group. "It just matters to me if it's in the right place at the right time."

TV Upfronts

Weak TV Ad Market Fuels Buyer Uncertainty as Upfront Negotiations Loom

With spending down, buyers push for greater flexibility in this year's talks

Bill Bradley

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