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ABC Sees Primetime Ad Gains in TV’s Upfront Market

Walt Disney’s ABC secured new ad dollars for its next primetime schedule, the latest broadcast TV network to benefit from a renewed emphasis on the medium by Madison Avenue.

Advertisers increased their commitments for new commercials between 5% and 10% for programs such as “The Bachelor,” “Dancing With The Stars” and the final season of “Modern Family” as part of TV’s annual “upfront” market, according to a person familiar with the matter. With those figures as a guide, it’s possible ABC could have secured between $1.95 billion and $2.42 billion, compared with the $1.6 billion to $2.2 billion it signed up in 2018. During the “upfront,” U.S. TV networks work to sell the bulk of their commercial inventory for their next programming cycle.

Rita Ferro, Disney’s ad-sales chief, faced an even headier task than the one she has had in past years. Thanks to a massive $71 billion acquisition of the bulk of the former 21st Century Fox, Disney found itself with a vast range of inventory to sell. In addition to ABC, ESPN, Freeform and the various Disney kids cable networks, the company also had to fill the schedules of the FX and Nat Geo suites of cable outlets.

Some executives familiar with this year’s negotiations suggested the sheer amount of inventory at hand slowed Disney down, and noted ABC had to compete for dollars against other TV outlets that fared better in the most recent season. But the company also worked to secure some buyers early in the process. According to some executives, Disney was able to secure a deal with Publicis Media Group that called for that media agency’s clients to get more favorable rates in exchange for making commitments well before the market opened more robustly.

Disney would seem to be the most recent beneficiary of a counterintuitive business trend: Despite the fact that viewers for traditional TV are moving to new video venues to watch their couch-potato favorites, advertisers are putting more money into TV, not less. ABC was able to register volume gains even as audiences scatter to streaming video venues like Netflix and Hulu. NBC, CBS, the CW, Univision and Fox have all seen advertising commitments rise in this year’s upfront market, not fall – the fourth consecutive year of gains.

Blue-chip advertisers have grappled with concerns about the quality of content available from digital rivals as well as transparency of the way digital audiences are measured. And they still need to reach viewers with ad messages. Despite the popularity of streaming video, some of its bigger purveyors, including Netflix and Amazon, do not run traditional video commercials in programming. In some cases, marketers are buying up new-video opportunities from old-guard purveyors. All the traditional companies have broadband opportunities as well as linear ones.

In a sign of how much advertisers continue to rely on TV and the bigger live audiences it collects, Disney sold about half of its inventory in its annual Oscars telecast, despite the fact that its 2019 broadcast snared 29.6 million – a 12% increase from the event’s audience nadir in the prior year, but still well below the glitzy award program’s viewership heights.

Disney used the high-demand-for-low-supply dynamic to press for higher rates. The company sought a 14% increase in the cost of reaching 1,000 viewers, a measure known as a CPM that is critical to these annual talks between TV networks and Madison Avenue. In 2018, ABC pushed for CPM hikes of between 10% and 11%.

The company sought rates hikes across its schedule, pressing for 10% CPM increases for NBA games telecast on ESPN and ABC, 20% CPM hikes for ESPN’s “Monday Night Football” and 7% increases for college-football telecasts.

Like its rivals, Disney saw high demand for digital inventory, seeing a 50% increase in commitments, and a similar increase in deals for so-called “advanced” advertising deals, which often call for more precise targeting of commercials through the use of data.

Advertisers showed particular interest in the freshman ABC programs “mixed-ish” and “For Life,” as well as Freeform’s “grown-ish,” “Good Trouble” and “Siren,” FX’s “Always Sunny In Philadelphia,” “Atlanta,” “Mayans” and “Snowfall” and Nat Geo’s “Genius”and “Aretha Franklin.”

 

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