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Upfronts 2014: Networks Widen Pitches to Include More Platforms, Longer Time Frames

To hook the interest of advertisers, the nation’s biggest TV networks have come to a unique understanding: They need to sell more than just TV commercials, and not everything they sell has to appear on the traditional TV screen.

This year’s upfront market, in which the big U.S. networks try to sell the bulk of their advertising, is expected by analysts and ad-buyers to come in flat or even slightly down from last year’s tally of $8.6 billion to $9.2 billion in advance ad commitments for the primetime schedules of the five English-language broadcast networks. Cable’s overall take, many believe, could inch up.

To keep money from flying elsewhere, the race is on to find new ways to provide the big audiences advertisers expect from broadcast programs. Terms like “dynamic ad insertion” and “C7” deals are being heard in discussions with advertisers alongside cross-media pitches and invitations to one-stop shop across a company’s many platforms.

At Fox’s upfront presentation to advertisers last week, entertainment topper Kevin Reilly noted that as much as 40% of the audience for the network’s younger-skewing shows came from streaming and video-on-demand.

In a similar vein, Geri Wang, ABC’s president of sales, noted that 10 years ago, when “Lost,” “Grey’s Anatomy” and “Desperate Housewives” launched on the network, each commanded an average of 20 million viewers, nearly all of whom watched live. In today’s world of tablets and online video, she said, a show still reaches that number, but not on traditional TV only. “So while the audience size hasn’t changed, the way they watch has,” she told buyers at the Alphabet’s presentation. “Our job is to help you navigate.”

Donna Speciale, president of ad sales for Time Warner’s Turner, which recently consolidated its TV and digital marketing operations, invited sponsors to consider a range of options. “Consumers are accessing more content across more screens than ever before,” she said. “TV, online and mobile content is all coming together. We can now have one conversation with you about all the great opportunities we have (for) your brands.”

That kind of pitch — the TV network as one item on a bigger advertising menu — surfaced in several presentations. At the ABC event, Wang and Ed Erhardt, ESPN’s president of global customer marketing and sales, delivered a rare joint sales pitch that asked attendees to consider the idea of using ABC to reach women and ESPN to reach men. “Yes, Mars and Venus have aligned!” Wang said.

Early last week, NBCUniversal ad sales chief Linda Yaccarino asked attendees of the Peacock’s presentation to consider buys on the company’s cable outlets as well as its broadcast network (indeed, NBCU was gearing up to break out a separate presentation on its cable assets later in the week).

At Fox, execs paused to talk about parent 21st Century Fox’s sports programming -— much of it on cable’s Fox Sports 1. Univison spotlighted not only its flagship Spanish-language network, but also Fusion, the news-and-culture cable net it owns jointly with ABC News; El Rey Network, the independent cabler launched by filmmaker Robert Rodriguez in which it owns a minority stake; and its UniMas cabler, aimed at Hispanic millennials.

But the cross-media pitch isn’t the only way the networks are asking advertisers to move beyond TV.

CBS and Fox are offering sponsors a technique known as dynamic ad insertion. The idea is to digitally inject fresh advertising onto recordings on a consumer’s DVR, so that if a show is viewed several days after it airs, the ads remain timely. ABC unveiled an experiment under which it would make some ad inventory sold in streaming video from both the network and ABC Family available for purchase via software programs that use big data. In April, Yaccarino suggested NBCU was willing to earmark certain kinds of advertising for such sales using systems built by advertisers themselves.

Cross-media packages have long been viewed as a growing necessity on Madison Avenue. In 2001, advertising giant Procter & Gamble, whose moves often serve as precursors to greater marketing shifts, struck a $300 million deal with a much larger Viacom, when that company also included CBS. At the time, executives from both sides released a statement that stated, “Cross-platform agreements will represent up to 40% of all media arrangements in the coming years.”

Such deals didn’t catch on immediately. Some tried to lump in lesser TV inventory along with some of the blue-chip stuff. Now, as advertisers recognize they must accumulate a customer base from many different types of interactions, they have more impetus to push media companies to get more creative.

To be sure, it’s a two-way street. The TV networks feel they are delivering the viewers advertisers want. It’s just that sometimes, they believe, it takes longer to bring them all together. Small wonder that Fox ad-sales president Toby Byrne suggested marketers make so-called “C7” deals, or agreements that use the audience built over seven days after an episode debuts. At present, TV networks get paid for only three days of viewing, because some advertisers feel their messages become less timely over that period.

Thanks to the new ad-insertion technology, however, TV networks hope that will change. “We need to have a meaningful discussion about C7 for our business today, and tomorrow,” Byrne said.

Will that idea gain traction? For some, yes. But the industry needs to work faster to prove to advertisers that viewers will stream network shows on tablets, too — before YouTube and AOL lure those dollars elsewhere.

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