COMMENTARY

With Upfront Fallout, Questions About Connected TV, Cancellations Remain

• by Wayne Friedman , Staff Writer, November 10, 2020

The TV upfront market this year is still a mystery -- and not just in terms of where new expected media dollars in the calendar year budget land. We would like to know exactly where specific connected TV spending landed.

Answers are tough to find.

TV's advertising upfront market for the 2020-2021 TV season has taken a tumble -- so far -- down 15% to $18.6 billion from $21.9 billion in the previous market for the 2019-2020 season, according to Media Dynamics.

We are not factoring in cancellations/option considerations as yet because we don’t know what’s coming.

Media Dynamics estimates massive cancellations for the 2019-2020 TV season of $2.9 billion, impacted by the COVID-19 pandemic -- roughly 13% of that year’s total upfront take. (Typical seasonal cancellations can amount to roughly 1% to 2%.)

Much has been made over CTV advertising dollars shifting out of live, linear upfront TV spending -- especially considering the reported gains by The Trade Desk, the big demand-side platform and Roku, perhaps the biggest connected TV supply-side platform.

(Also, we don’t yet know where Roku-competitor Amazon Fire TV is with regard to connected national TV advertising dollars.)

Still, let’s take a swing: Have big brand advertisers made up some ground contributing 3%, 7% of 10% of their advertising dollars to new CTV/OTT? Analysts speculate roughly; it's even harder to determine with lower ad inventory CTV and OTT platform loads.

One estimate overarching projection made by eMarketer had ad revenue on CTV rising to $8.88 billion. Perhaps 10% to 20% of that might have made its way into the upfront TV media deal-making. At best, around $1.8 billion?

More fuzzy math: Cancellation options surely might be different on new platforms versus buying on live, linear TV networks. And what about possible premium priced OTT/CTV deals? Factored into any price consideration, would need to be strong business outcome attributions.

Ultimately, placing multimillion-dollar TV advertising schedules months in advance of airing that messaging -- what the traditional TV upfront offers -- is definitely more old-school than new.

Before we move to connected TV, the learning will continue: Fresh -- and refresher -- courses are needed.