"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Jay Prasad, chief business officer at VideoAmp.
As consumers become more and more screen-agnostic in the next few years and networks increasingly turn to year-round premieres and first-run episodes, there’s just no way that ad transactions can continue relying on the current ratings metrics and traditional windows for new programming.
Brand advertisers are investing heavily in trying to understand their customers, just as TV programmers are looking to understand their audiences. Both sides want to leverage that understanding, which means the current upfront system must change.
The upfronts started decades ago, geared toward filling up ad slots in programs during the traditional TV season that starts each fall. The process itself takes months – this year, Viacom began the hoopla phase during the first week of March with presentations for its cable networks. Then, once the three months of dog-and-pony shows end, ad agencies and the major networks negotiate for another six weeks or so.
The networks then get their money for upfront inventory. The remaining inventory goes to the scatter market, digital inventory is applied to “fluidity” budgets but largely gets sold separately and programmatic buying handles any remnant leftovers – perhaps 10% of the total at most.
But don't be fooled by those programmatic and digital crumbs. The buying and selling of linear TV advertising is still stuck in restrictive silos developed way back when the networks first wrested control of programming away from advertisers.
No longer owning the shows themselves, advertisers were forced to buy spots in specific programs. Such program-based transactions served the networks and advertisers extremely well for decades – until linear TV was no longer the only way video is mass consumed.
Now, with the rapid move toward viewing over streaming devices, the industry is inevitably headed toward emulating other digital media by switching over to audience-based buying and selling.
And with so many shows now launching, airing and thriving in all seasons on all platforms – from cable networks to OTT services – waiting for one specific time period to make ad transactions no longer makes much sense.
Viacom, Turner, NBCU and A&E were early to meet these new realities with technology-based solutions. Viacom Vantage was described at its launch events as “data-driven ad product that enables advertisers to reach their custom targets at the program level.” Viacom Vantage was followed early this year with the similarly inclined Tuner Ignite and NBC Audience Studio. A&E Networks, meanwhile, has blazed trails on the OTT front.
So change is coming.
Audience-based transactions mean leveraging the unprecedented amounts of data now available – via sources ranging from online cookies to traditional CRM – to more effectively buy and sell inventory across all screens and content. And that includes linear programs.
If an advertiser wants to reach adult males in the market for SUVs, for example, a futurist-based, audience-first, screen-agnostic marketplace will home in on specific inventory that gets it there regardless of when and where – whether it’s a pre-roll on a specialized smartphone video or a 30-second spot on a big-screen sports event.
In a TV environment where non-ad-supported OTT fare continues to gain year-round traction and linear ratings continue to fall, sticking with manual program-based transactions is a recipe for disaster. Advertisers want to reach specific audience segments wherever and whenever they’re available, and content providers now have the ability to deliver the goods.
This new type of transaction will undoubtedly be much more efficient than locking up a large bulk of inventory once a year through the traditional upfronts.
But upfront fans needn’t worry, Upfront buying will survive. Call it advance buying if you prefer. There may even be more upfront buys in the future, but they’ll be done year-round. And they’ll be audience-based rather than program-based.
So let’s raise a glass to upfront parties all year long.