COMMENTARY

Upfront TV Ad Eye-Opener: 'Negative' Linear TV Pricing, But Higher Overall?

• by Wayne Friedman , Staff Writer, June 1, 2023

With upfront TV negotiations currently going on -- and cost-per-thousand viewer price hikes looking as likely as the Boston Celtics hoping to play one more game against Miami Heat to decide the NBA's Eastern Conference Champion -- one might consider everything affecting a probable weak market.

It is not just continuing viewer erosion of live, linear TV programming, according to many -- but a notable and continuing, expected downturn in the economy overall. 

Think about the current U.S. ad economy projection from Dentsu -- which has lowered its outlook. Media price inflation, according to Peter Huijboom, chief executive officer of Dentsu Media International Markets, “hides the more lackluster reality: 2023 will be a flat year for ad spend."

For many media companies the latter would be good news. For TV, a flat market would be a cautious, hopeful dream. For their part, TV networks have hit advertisers with repeated media inflation over recent years, according to many experts.

But this time looks to be quite different. Meld this with all other factors, and many expect that for the first time in more than a decade, CPMs  -- especially for live, linear TV -- could be in the negative territory. 

And don't forget about current marketplace conditions, which many still regard as an important measure of where the upfront will land: The near-term buying of national TV inventory in the "scatter market."

TV networks will continue to push toward the positive -- the still shiny, relatively new objects of connected TV streaming platforms that consumers are fond of -- even as many might be looking to make slight streaming cutbacks. 

Expect press releases from TV networks later this summer to highlight this area. So much so that they might be talking up positive CPM price hikes -- all in.

And did we forget to tell you there is still a writers' strike going on? Remember, the last one lasted several months -- the 2007-2008 TV season (from November 2007 to February 2008).

Finally, we would be remiss not to add in the complexity or volatility that is associated with measurement disruptions. It is more than having multiple, new non-traditional metrics to consider -- it is also about doing deals this year, while at the same time thinking about next year's industry upset to come when Nielsen releases its cross-platform Nielsen One.

Uncertainty is always a term tossed around in pre-upfront conversations and observations.

But this year, for many analysts, media buyers will look with certainty to be in the driver's seat. Even if in slow-moving vehicles.