High-Priced Scatter Deals May Not Worry Brand Advertisers

• by Wayne Friedman , Yesterday

Big TV-focused brand marketers are now less concerned about price hikes in the scatter TV marketplace, according to a recent study from Advertiser Perceptions.

Thirty-eight percent of media-executive respondents made upfront deals to “avoid rate hikes in the scatter market” -- down from 49% a year ago, according to a June 2021 survey from the ad-business research company.

This comes after marketers rushed into the upfront marketplace this past summer, resulting in a massive 20% to 25% cost-per-thousand viewer (CPM) price increases. In addition, brand TV marketers shifted 20% to 25% of their budgets to TV network-associated premium streaming platforms.

The upfront market is where broadcast and cable TV networks can sell 65% to 75% of their inventory throughout the September-August TV season at reduced rates versus the quarter-by-quarter scatter market TV season that occurs throughout the year.

Marketers have traditionally placed a majority of the national TV budgets on networks to avoid higher-priced scatter deals.

Growing connected TV media deals may be having a major effect on business -- in terms of pricing and when to place messaging.

“CTV is altering the notion of a calendar,” says Erin Firneno, vice president, business Intelligence at Advertiser Perceptions.

“While advertisers are compelled to buy upfront to secure limited premium inventory, streaming programming does not follow the linear TV calendar. ... As audiences redefine prime time and programming, the companies that showcase a wider portfolio at the upfronts have a decided edge.” Firneno added.

At the same time, 68% of advertisers say they are willing to pay higher prices to lock in “video ad opportunities” -- up 19 percentage points from last year. This includes all video platforms -- linear TV, on-demand, streaming and digital.

Advertiser Perceptions surveyed 307 advertising executives in June 2021 — 50% marketer, 50% agency — who run national TV and digital video advertising.

The TV upfront market this past summer came after a weakened and uncertain national TV advertising marketplace in August/September -- just before the start of the 2020-2021 TV season, which was still in the depths of the COVID-19 pandemic.