TV Ad Buyers And Sellers Are Feeling Their Way Through Unprecedented Upfront

The myriad complications and stresses of the COVID-19 pandemic have created a television upfront season unlike any in memory.

In a typical spring and early summer, deals close for about one-third of the annual $70 billion in total TV ads. This year, most bets are off, at least for the near term. Ad spending is in free fall across the TV landscape and the U.S. economy continues to struggle, with Great Depression levels of unemployment and sharp declines in consumer spending.

The TV upfront ritual, which initially coalesced around the introduction of new car models and the corresponding premiere of fall programming, helps buyers lock in discounts. The alternative to ads bought “up front” are higher-priced, “scatter” spots landed closer to airtime. Selling in advance also gives sellers a firm foundation of revenue heading into the traditional September-to-May season. This year, without live sports or production of new series, the environment is riddled with uncertainty.

“Each network is approaching it differently,” Macquarie analyst Tim Nollen wrote in a recent note to clients. “Many advertisers are unable to commit to budgets, and many TV networks don’t have finished product to sell.”

The wide differences in the approaches of the five English-language broadcast networks illustrates the high degree of uncertainty. Due to the pandemic, their usual blitz of pitches to ad buyers during a single mid-May week in New York City, went out the window.

CBS did its best to honor its annual Carnegie Hall embrace of the traditional TV ad biz, holding a two-day online showcase of ViacomCBS offerings that reflected an upbeat outlook through next February’s Super Bowl. Fox ditched any semblance of its usual upfront, straightforwardly announcing a pandemic-resistant lineup of fall shows and pushing new programming later in order for major franchises like The Masked Singer to resume production. Ditto with the CW, which will effectively launch its season in January.

NBC convened an “update” videoconference with its ad executives, but it has held off announcing programming plans. (One of its key blocks is Sunday, with Sunday Night Football the top-rated show on TV for more than a decade but the fate of the NFL season currently hanging in the balance.) ABC announced its slate and will hold an online “road show” event for ad buyers on Wednesday, alongside other Disney brands, but has delayed releasing its schedule until more puzzle pieces fall into place.

Instead of large blocks of ads bought in the upfront, “this year’s TV ad market will rather be a series of deals progressing over several months, and probably not coming close to the usual volumes,” Nollen wrote. Billions have already vanished due to major sports events like March Madness, the Masters and the NBA playoffs being canceled or postponed. The question looming over networks is whether some of that spending will disappear permanently, as some Wall Street analysts have predicted.

Carlos Brito, CEO of Anheuser-Busch InBev, said on the major TV advertiser’s quarterly earnings call this month that the company is “trying to promote less” given the economic conditions. The company is “trying also to curb some media spend and put more online, trying to be more in tune with consumers and trends so we allocate resources in a more effective way.”

Many buyers in categories like hospitality, feature films or automotive have been forced to the sidelines. Omnicom CEO John Wren said some of the agency’s blue-chip clients, like Pepsi and AT&T, are “still actively engaged in trying to address themselves to their employees and to the public with messages of support.” Insurance and pharmaceuticals are among some categories retaining a strong TV presence.

Sean Muller, founder and CEO of ad tracking firm iSpot, told Deadline a number of top brands remain committed to TV ads in what he calls the “biggest buyer’s market on television in several decades.” Citing the example of one major insurer iSpot works with, he said advertisers interested in staying active “are getting inventory for pretty cheap, so they’re not pulling back. They’re actually they’re getting a lot more media for the same dollar.”

There have been encouraging signs in recent days of major sports like college football and the NBA returning by August. Professional golf will be on the air in June, kicking off a run of two and a half straight months of weekend broadcasts on CBS.

Jo Ann Ross, head of ad sales for ViacomCBS, told Deadline that talks with buyers have taken on a new sense of pragmatism and problem-solving, given the fact that both sides have limited visibility into the future. While some observers have said 2020 could finally alter the longtime academic-year selling cycle and turn it into a calendar-year process, Ross said that already happens for buyers who request it. In the COVID-19 environment, the spirit “isn’t so much about reinventing the wheel as it is responding to the crisis. … We will work with our clients the way they need us to work with them.” Ross said she has taken to using the phrase “constructive disruption” to describe the COVID-19 climate.

For all of digital media’s appeal, including targeting, television is still the most potent reach medium, Muller says. “We think they’re still in a good position,” he said of the broadcast networks. “But they do need to go sort of above and beyond now more than ever. They’ve got to show some flexibility. They got to show more innovations around audience targeting and outcome based measurements. They’re already going down that path, but I think it’s accelerating.”

Advertisers also are learning to adapt in some positive ways, Muller said, and should see benefits longer-term after some short-term pain. Before the pandemic, he said, “a lot of advertisers were so you used to just setting a media plan at the beginning of the year, maybe making some tweaks once a quarter, and that was it. But with COVID-19, everybody was forced to make quick changes and decisions. And so I think the mindset is really change right now to ‘Wow, maybe we can be more nimble on TV and maybe we can optimize TV more rapidly and that can have really good results.'”