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Home Spending & Saving

How TV networks managed between securing upfront commitments and saving inventory for scatter advertisers

MtR by MtR
June 28, 2021
in Spending & Saving
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How TV networks managed between securing upfront commitments and saving inventory for scatter advertisers


The latest cycle of TV advertising’s upfront deal-making is likely to put even more pressure on an already tight linear TV and streaming ad market. TV networks managed their inventory in an effort to maximize the amount of money they received in the upfront as well as the money they stand to reap outside of the annual commitments. 

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“Definitely there is a law of reserving some of our inventory to make sure that we’ve got a scatter marketplace to sell into,” said one TV network executive.

In this year’s upfront negotiations, TV networks sought to strike a balance between securing ad revenue in advance without selling out so much of their linear TV and streaming inventory for the next year that they will not be able to reap even more money from the so-called “scatter” markets, where linear TV and streaming inventory leftover by upfront advertisers is sold for higher prices. 

“You don’t want to be oversold in the upfront. You want some money in the scatter market to play where advertisers have [a] need and you are able to sell to a premium in a scarce marketplace,” said a second TV network executive.

For at least one TV network, this year’s upfront deals are expected to represent roughly 20% of the total money it plans to receive from advertisers over the next year, according to an executive at that company. However, that amount is more of a guide than a rule as TV networks may bring in even more money from the scatter markets for both linear and especially streaming, where networks have more latitude.

“I wouldn’t want to say we’ll utilize X percent of inventory in streaming because it’s still growing,” said a third TV network executive. “Unlike linear where there are X number of commercial units per hour of programming and you have a sense of how many commercials to sell, streaming is constantly growing.”

Despite that growth, agency executives have said there is a lack of TV-quality streaming inventory on the market. They attribute that dearth to the lower-than-linear ad loads on TV networks’ streaming-only services as well as the relative nascency of those properties, which are still accruing audiences. The situation could change, though, as TV networks find ways to inject more supply into the streaming ad market.

“As more programming is launching on streaming first, that gives us the opportunity to test and learn ways to create even more pockets of inventory during periods of high demand or lower the price of [streaming service] subscriptions to get people to sign up. There are a lot of toggles that didn’t exist in the linear world,” said the third TV network executive.

An increase in supply doesn’t necessarily mean a decrease in ad prices, though. TV networks already succeeded in getting upfront advertisers to agree to streaming ad price increases, and the surging demand for TV-quality inventory on linear and streaming puts them in position to press for even higher prices from advertisers outside the upfront. “We expect a healthy scatter market,” said the second TV network executive. Ad prices for linear scatter inventory are already 40% higher than their usual rates, according to Brad Geving, vp of media at TV ad buying firm Tatari.

The pressure on the linear and streaming scatter markets is pushing advertisers to lock up inventory early. Tatari is already buying inventory through the third quarter and talking to clients about fourth-quarter plans to pounce as soon as that inventory becomes available, Geving said. Others are looking even further out. “We’re having conversations [with clients] about Q2 of next year already,” said Bill Durrant, president of Exverus Media. 

Advertisers are feeling pressed to secure TV and streaming inventory as early as possible in order to ensure they are able to reach as many people as possible and, for digital-native advertisers in particular, to relieve their reliance on social platforms and search where prices are also increasing and campaign performance is maxing out, Durrant said. In addition to prodding advertisers to push up their scatter buying strategies, the supply-demand dynamic pushed some advertisers into the upfront market.

A number of automotive, quick-service restaurant and retail advertisers participated in this year’s upfront for the first time, said a fourth TV network executive. This person attributed their entries to advertiser fears about “availability and price in the scatter and programmatic market for streamers.”

Depending on how many scatter advertisers made that move — and how much inventory TV networks put on ice — it could have ripple effects on linear and streaming inventory availability and pricing that, for now, remain to be seen. “The big question looking forward is how much of scatter was pulled forward… What will that market look like?” said a fifth TV network executive.

How TV networks managed between securing upfront commitments and saving inventory for scatter advertisers



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