Analyst: Upfront Forecast To Move Slower, Smaller Gains

• by Wayne Friedman , June 15, 2017

While TV’s upfront advertising market continues early negotiation talks, one estimate now says total dollar volume will be down by mid-single-digit percentages -- reversing versus gains of a year ago.
John Janedis, managing director/media analyst of Jefferies LLC, estimates total volume will be down 3% to 5% for all national TV inventory, with broadcast networks generally outperforming cable networks.

For last year’s upfront market, Media Dynamics estimated national TV advertising grew 4.5% to $18.6 billion, with broadcast networks pulling in $8.75 billion and cable networks tallying $9.86 billion.

This year, Janedis says to look for more big TV network groups to sell all their TV inventory -- broadcast, cable and associated digital platforms otherwise.

Plus, networks will seek more dollars by shifting to C7 from C3 ratings guarantees for national marketers. C3/C7 ratings are Nielsen’s average minute commercial ratings plus three or seven days of time-shifted viewing. The national TV market is estimated to be split 50-50 in terms of C3 and C7 deals.

“The desire for more C7 volume may also slow down the market, but will likely get done,” says Janedis.

When it comes to pricing, he says, the market looks to pull in “mid-single-digit” percentage gains in the cost-per-thousand viewer pricing [CPM], down from a year ago.

Last year’s strong market scored high 9% to 12% increases in CPMs for many broadcast networks, which quickened the pace of the market overall.

Janedis says: “We continue to think NBC will lead the market from a CPM perspective, with the rest of the industry falling into a fairly tight range once NBC sets the market... CBS will likely come in just below NBC, but more C7 volume will make it difficult to make direct apples to apples comparisons.

“Cable-only network [groups] are... starting to write small deals rather than waiting until the TV nets wrap up.”