“The one and only time we were together was last December when we rang the bell” at the stock exchange, ad sales chief Jo Ann Ross tells Deadline. As soon as the pandemic started forcing the cancellation of events in March and April, Ross said, “We quickly got the troops together and said, ‘OK, we still need to stick a flag in the ground.'”
The result is a two-day set of online presentations, which will be made available on demand on Monday and Tuesday. The digital offerings are a “consumable,” “snackable” version of the Viacom client dinners hosted by CEO Bob Bakish and the long-established CBS extravaganza at Carnegie Hall, Ross said. While some media rivals have ditched the upfront ritual altogether, that option was never seriously considered. “We wanted to put together a virtual presentation that would be fun and would have content, that would entertain,” Ross said. Media buyers “are going to lean in and laugh. They’re going to know it’s tongue-in-cheek, that it’s fun. And we’re going to get them in and out” instead of requiring hours of time criss-crossing Manhattan.
About 80% of the CBS broadcast schedule has remained intact despite the production shutdown. Sports has been a looming concern, with the NFL maintaining it plans to start its fall season on September 10 as planned. CBS is not only a regular-season broadcaster but in February 2021 it has Super Bowl LV, the first of two NFL title games in three years as a result of an Olympics-related swap with NBC. Stakes are high for the game, with Fox reporting $600 million in ad revenue on the day it aired Super Bowl LIV last February. While some sectors of the economy and the marketing world remain intact — insurance, pharmaceuticals and consumer technology — many other categories have been brought low by the crisis. With unemployment at Great Depression levels and daily business in a deep state of uncertainty, it’s hard to know if the ad-palooza of Super Bowl Sunday will return in 2021.
While there are many “what-if scenarios” being discussed daily as far as sports, Ross said, “we are planning to go forward with the Super Bowl as planned,” and the NFL and related on-air talent will be a key element in the online upfront. If the season is delayed or even canceled by COVID-19, “there are contingencies in place,” she added, declining to offer details. In March, CBS and WarnerMedia endured the cancellation of the NCAA men’s basketball tournament, offering ad buyers a mix of rebates, make-goods and “re-expressions.” Two small consolations in the case of March Madness are the fact rights are split between two companies as well as the long-term sponsorship deals that certain brands sign with the NCAA, which offer networks a degree of protection.
The loss of live sports is one reason why Wall Street analysts and ad-industry observers expect a significant downturn in advertising revenue through at least the end of 2020. “This year’s upfront market is thoroughly disrupted,” wrote Macquarie’s Tim Nollen in a recent report. “Rather than an upfront week of presentations followed by negotiations to pre-sell up to 80% of the TV year starting in September, 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.”
Michael Nathanson of MoffettNathanson told clients on a recent conference call he has long expected the next recession to “level-set TV spending.” In particular for cable networks, he said, “What I worry about going forward is, if you’re not an essential content vertical … the pricing stick you’ve used to keep this business in check will weaken. … Ultimately, cable networks that don’t have endemic ad support and are not live are at major risk of seeing declines. That will be true too in broadcast, in certain broadcast dayparts where there isn’t enough reach to justify a premium.”
Based on data from Nielsen and various media and digital companies, MoffettNathanson estimates that TV this year will slip below 30% of all U.S. advertising dollars spent for the first time since the medium was born. Digital spending, which first eclipsed TV in 2016, is likely to top 60% of the total.
Ross said flexibility has been the key. Many stakeholders in the nearly $70 billion TV ad business expect it to move to a calendar-year structure, given the evolution of the auto industry (traditionally the driver of the upfront) as well as the anachronistic notion of new programming only existing from September to May. Ross said networks have always tried to accommodate buyers, including offering them calendar-year upfront deals.
“We will work with our clients the way that they need us to work with them,” she said. That concept will be especially true in 2020, a year of dramatic upheaval to supply chains and business practices in nearly every sector. “It’s hard to make a prediction when you don’t have any product on the shelf, or when you have product but you can’t get it to the shelf” she added. “It’s going to be a different pacing, a different cadence for the short term, and maybe it will change for the long term. … I don’t think there’s one simple answer.”