TV’s “upfront” ad-sales market is starting to move — and earlier than expected.
Just days after the networks wrapped glitzy programming presentations to Madison Avenue executives, Walt Disney Co. is said to have written some business with at least one major media buying agency, according to three executives familiar with recent discussions. Disney is “ahead of the market,” one media buyer said. In the industry’s annual upfront process, U.S. TV networks try to sell the bulk of their commercial inventory ahead of their next cycle of programming.
One of these people indicated that Disney’s upfront conversations “are going very well” and that the company is “making significant progress,” and is seeing “avid demand” for entertainment programming, sports, live events and content aimed at diverse audiences.
The terms at which Disney may be doing business could not be immediately learned, but executives at both the networks and at various media agencies acknowledge that the TV companies have not been fighting for the massive rate increases they won last year.
In 2021, the networks pressed for increases of 16% to 22% in the cost of reaching 1,000 viewers — a measure known as a CPM that is essential to these annual talks between TV networks and Madison Avenue. In 2022, many of these people suggest, the networks are haggling for CPM hikes in the mid-to-high-single-digit percentage range, hopeful they can make money by driving a large volume of advance ad commitments across streaming and linear venues, rather than forcing some portion of their deals at exorbitant rates of increase. One buyer suggested that if the networks focus heavily on capturing volume, they may choose to relax some of their CPM asks further.
Disney has a lot of highly-coveted commercial inventory to sell. The company has devised a “mega-cast” for ESPN’s “Monday Night Football” that will feature former Fox Sports hosts Troy Aikman and Joe Buck in the booth, and a second show tied to the game led by Peyton and Eli Manning. In addition to the NFL, ESPN also has Major League Baseball, NBA and NHL rights for dozens of games. And Disney is giving advertisers access to limited ad inventory in Marvel and Star Wars series, along with other programs, that run on a new ad-supported version of Disney+.
At the same time, Disney is not immune from the ways technology has changed the way people watch TV. More of the people who form the big audiences that watch “Grey’s Anatomy” or “Good Morning America” have migrated to streaming their favorite shows “on demand” at moments of their own choosing. That dynamic is forcing big advertisers to spread more of their dollars from primetime TV to ad-supported streaming venues. That money can go a lot further in streaming, where ad unit prices remain significantly cheaper than those found on broadcast TV. Competition for that portion of Madison Avenue’s pocketbook has started to heat up. Warner Bros. Discovery’s HBO Max is also offering limited commercial opportunities in an ad-supported version of the service, and Netflix has indicated that it, too, will soon look to launch a version of its service that includes ads.
There has been some speculation among media buyers that Publicis Media, the media-investment arm of the French ad giant Publicis Groupe, has closed some early upfront deals. Publicis and Disney have been strong partners in the recent past. Earlier this year, Publicis struck a deal with Disney to test new systems of audience measurement set to be implemented by Nielsen later this year. A spokesperson for Publicis Media did not respond immediately to a query seeking comment.
In recent years, the upfront market hasn’t typically opened in earnest until after Memorial Day weekend. In 2021, however, advertisers’ interest in gaining a toe-hold in streaming inventory forced them to move more quickly. In 2021, Disney, Fox and NBCUniversal all had been working on deals, and some parts of their structure were revealed quickly after the holiday. Fox and NBCUniversal declined to make executives available for comment about their upfront progress so far in 2022, as did two other big sellers, Paramount Global and Warner Bros. Discovery.