What Marketers Can Expect From the 2021 Upfronts

Imagine there was a restaurant that made you order your food nine months in advance, but when the food came, it was half the size of the portions on Yelp. So the restaurant tried to make it up to you by serving lots of appetizers that you didn’t even really want.

This is the plight of media buyers in 2021. Well, sort of. It doesn’t involve food. But it does involve not necessarily getting what you’ve paid for.

Marketing Brew spoke with six media buyers and advertisers to learn what they’re expecting out of this year’s upfronts, a year after the industry had to improvise its way through buying and selling inventory in the middle of a pandemic.

• They expect rates to increase despite last year’s upheaval—even though ratings are falling.
• They know streaming services won’t make it easy.
• And they’re still prepared to spend an enormous chunk of change on advertising.

What’s an upfront, anyway? At the upfronts, media buyers agree to pay networks like NBCUniversal a certain amount of $$ to air ads on behalf of clients for the coming year. In return, these networks promise eyeballs (or “reach,” in marketing parlance.)

But traditional TV viewership continues to shrink (this year’s Super Bowl, live television’s marquee event, saw its worst ratings since 2007, and the Oscars didn't fare any better). This makes it increasingly difficult for networks to actually give media buyers the viewership they’ve paid for.

But networks still have the upper hand. Here’s why:

• While media buyers are snapping up inventory, networks hype ratings for certain shows and broadcasts.
• When those ratings inevitably come up short, networks are often stuck with a “make good”—a guarantee that brands will get the eyeballs they paid for somewhere.
• This limits the supply of actual inventory throughout the year. So supply goes down → prices go up.

Geoffrey Calabrese, chief investment officer at Omnicom, said “the only reason it's a sellers’ market is because of a shortage of linear [TV] supply based on delivery issues.” In other words, networks can’t “deliver” as many viewers as they want at any given time. "There's mass under-delivery across the board,” he said.

And streaming still hasn’t caught up: “You’re still going to get a larger audience via linear than you would for streaming, even at an underdelivered metric,” he said.

• Case in point: This year, 91.6 million people watched the Super Bowl on CBS, while 5.7 million streamed it.

A reminder: Netflix and HBO aren’t ad supported, and neither are 30% of Hulu’s 82 million viewers.

What pandemic?

Even as marketers stumble from the rubble of 2020, networks are raising their costs. Multiple media buyers told Marketing Brew that networks are looking for a 10% increase in cost per impressions compared to last year.

“They can't expect double digit increases because people are getting vaccines and wearing masks,” Mike McHale, head of activation at creative media agency Noble People, told us, explaining that networks are trying to use the recovering economy as a reason to charge more.

Networks are “testing what they can get” with limited supply, according to a media buyer speaking on background.

Stream it

Audiences are turning to streaming, but for media buyers, it isn’t so simple. Between Peacock, Paramount+, and Hulu (owned by Disney), legacy networks can directly reach streaming audiences. And streaming is included in upfront negotiations.

But...streaming is measured differently than TV, adding another layer of complexity for media buyers. “The challenge for us is that we are trying to combine different measurements for television and digital, and package that into one buy,” said the media buyer who spoke on background.

Plus, each network has its own way of doing things.

• “We can measure the frequency and the reach of everything in NBCU or everything in WarnerMedia, but I don’t just do business with NBCU or WarnerMedia,” this buyer said. “I do business with all of them, and I need to be able to pull all of that together. Each partner wants to sell their own solution in their own walled garden, and that doesn't work.”

Molly Finnerty, SVP of strategic investment at Magna Global, agreed: “It's hard for us to make the perfect recommendation for a client to better mirror how media is being consumed...It looks different with each partner.”

Last week, a TV industry group called OpenAP debuted a feature created to alleviate some of these issues. It will “help advertisers more efficiently place and measure ads across separate digital and traditional TV systems,” according to The Wall Street Journal.

These types of features need “to come from a third party, otherwise you’re just fueling the walled gardens,” said another media buyer unauthorized to speak on the record. “OpenAP is an interesting angle because it’s more holistic...but I don’t know if it [changes] anything, certainly not in the short term.”

Of course, if you need to move more than 125,000 SUVs, the upfronts might be the best place to do it. Hyundai has launched its largest ad campaign yet to promote its best-selling vehicle, the Tucson, and investments made during the upfronts will be a large part of the brand’s strategy.

• “We invest well in the upfront,” Hyundai CMO Angela Zepeda told Marketing Brew. “Some people question that, but for us as a challenger brand, we need that big broad awareness still. It’s competitive…We want to be where people are tuning in and watching.”

While there’s no saying yet how long TV will remain the focus of the upfronts, it’s still king, said Finnerty: “It’s instant mass reach. It’s instant mass awareness.”