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AT&T’s Turner Sees Volume Growth in TV’s Upfront Market

AT&T’s Turner cable-TV unit expects volume of advance ad commitments to grow between 3% and 5% in TV’s “upfront” market, thanks to marketers placing more of their funds on the company’s growing suite of products aimed at getting commercial pitches in front of specific types of viewers. It is the company’s first “upfront” process to be completed under AT&T’s ownership.

Turner operates some of TV’s best known cable networks, including CNN, TNT and TBS.

Turner expects volume of advance commitments to increase between 3% and 5%, according to a person familiar with the matter. Drawing a through line from upfront commitments to cold ,hard cash is always a dicey prospect, but Turner had revenue of approximately $12.1 billion in 2017, and saw advertising revenue dip $109 million, or 2%, during the year, according to filings from Time Warner, which owned Turner until the company was made into a unit of AT&T called WarnerMedia in June. In 2017, Turner expected a volume increase of around 5%.

Turner is one of the last major media companies to complete its sales during TV’s annual “upfront” market, when U.S. TV networks try to sell the bulk of their advertising for the coming program cycle. The company had a prolonged negotiation over prices with GroupM, the large WPP buying unit, according to two people familiar with the discussions. A spokesman for GroupM did not respond to a query seeking comment and Turner declined to make executives available for comment.

Like other TV companies, Turner was able to secure higher ad rates. The company pressed for an increase in the cost of reaching 1,000 people, according to the person familiar with discussions, in a low double-digit percentage range. The measure is known as a CPM and is central to these annual discussions between advertisers and TV networks. In 2017, Turner sought CPM increases of between 8% and 9%.

Marketers gravitated to a growing series of Turner efforts to help them place advertising around specific kinds of audiences, in addition to the linear viewers who watch TV programs in real time. Turner saw ad commitments placed into so-called “audience-based targeting” deals increase by five times over last year’s upfront market, this person said. It’s a sign that Madison Avenue is increasingly interested in using data to place commercials opposite narrower swaths of audience who are interested in a particular genre of programming or even a specific kind of product or service.

Media Dynamics, a consultant that tracks ad spending, has estimated cable networks secured around $11.1 billion in advance ad commitments in TV’s upfront market, marking a gain of 4.7% over 2017.

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