As economic uncertainty grows, senior media buyers expect decent upfront pricing options across linear and digital
The networks sure picked a terrible week to pitch billions of dollars of ad time to media buyers.
The stock market tumbled severely yesterday just as most of the TV media companies wrapped their presentations to media buyers and marketers about their linear and streaming content plans for the fall and beyond.
Even scarier, some media buyers say clients are cutting back budgets, some significantly, or are at least seeking assurances they can move money out of the market and back to their bottom lines if economic indicators continue to worsen.
Ironically, the bad news could jumpstart an early beginning to dealmaking, as sellers look to fill their coffers sooner rather than later, and buyers seek out deals at reasonable CPMs relative to last year’s insane marketplace, which saw the linear TV networks secure CPM gains north of 20 percent, to the deep consternation and frustration of media buyers. According to one major media buyer who spoke on condition of anonymity, “the networks are looking to avoid too much reliance on the scatter marketplace” and are therefore itching to cut deals as soon as possible.
The buyer plans to play along, given how uncertain the second half of the year looks. Asked if they are worried about economic factors getting worse, the buyer said “I’m not certain, but I’m afraid of that. I think that I should strike a few early deals, and then sit back and wait to see the market develop.”
That buyer added that the market will not wrap up quickly, but rather will bog down in negotiations over cancellation options that allow them to ad deals within a certain time frame.
As far as pricing goes, another major buyer, Geoffrey Calabrese, chief investment officer for Omnicom Media Group, said, “It’s a very different market than last year. Sellers seem to be hungry for dollars all across their selling points, and it’s advantageous for the buying community. We’re in a better place this year, and so are the clients.”
One buyer expects the linear broadcast networks to secure CPM increases in the single-digit percentages, in part as a correction of sorts from the 2021-22 upfront marketplace, which saw the networks land significant CPM hikes over the 2020-21 upfront. The buyer also expects cable networks to secure about the same level percentage increases as linear broadcast, citing softer ratings for many cable networks as they feel the sting of audience loss to connected TV and streaming platforms.
The most aggressive of the media players, noted a buyer, is WarnerDiscovery.
New CEO David Zaslav recently met with the major agency holding companies’ top buyers, pitching the Discovery Premiere package, a mix of its most popular shows across the media companies’ properties. According to one buyer, Zaslav was seeking dollar volume increases up to 40 percent over 2021, and CPM increases of up to 25 percent. A Discovery representative declined to comment.
Another buyer that met with Zaslav and co., said “what they’re doing is upping the game to grab GRPs because they’re limited. From my perspective, it’s not a bad strategy.”
A third buyer who also met with Zaslav, said “He definitely wants volume for his Premiere package of all his best shows, plus sports, and is selling it as prime-time replacement. We don’t exactly know yet what it’s made up of yet, but he did promote that it was close to 15 dollars cheaper than prime bases.”
Meanwhile, the main digital players, from YouTube to connected TV and streaming services, are said to be pushing heavily for significant dollar-volume increases but are willing to accommodate by seeking limited CPM gains, as low as single-digit percentages — which has historically been low for digital inventory.
“There are certain players, you’re going to have to put your confidence in and pick that horse to win or show. And for those players, I’ll try to find the money,” said one of the senior buying executives. “Now, am I going to double it? No. Am I going to give them a sizable increase? The answer’s yes — if they cooperate with me on pricing.”
Of course, if economic indicators continue to darken, and a recession hits, all bets may be off for significant gains in any medium.
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