{"id":618547,"date":"2023-03-16T09:48:48","date_gmt":"2023-03-16T14:48:48","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/16\/future-of-tv-briefing-traditional-tvs-q2-upfront-cancelation-rates-signal-market-may-have-bottomed-out\/"},"modified":"2023-03-16T09:48:48","modified_gmt":"2023-03-16T14:48:48","slug":"future-of-tv-briefing-traditional-tvs-q2-upfront-cancelation-rates-signal-market-may-have-bottomed-out","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/16\/future-of-tv-briefing-traditional-tvs-q2-upfront-cancelation-rates-signal-market-may-have-bottomed-out\/","title":{"rendered":"Future of TV Briefing: Traditional TV\u2019s Q2 upfront cancelation rates signal market may have bottomed out"},"content":{"rendered":"
This week\u2019s Future of TV Briefing looks at the recent signs of recovery that TV network executives are seeing in the marketplace.<\/p>\n
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Q2 upfront cancelation rates came in at the usual range.<\/li>\n
Auto ad spending is starting to recover.<\/li>\n
The scatter and direct-response ad markets have improved.<\/li>\n<\/ul>\n
Traditional TV\u2019s advertising downturn seems to have hit bottom and begun to bounce back \u2014 a bit \u2014 if early signs for the second quarter are any guide.<\/p>\n
The rolling deadlines for advertisers to cancel portions of their Q2 upfront commitments with TV networks came and went in recent weeks. While some advertisers did scrap some share of spending, the cancelation rates were relatively run-of-the-mill, according to TV network executives, with some TV networks seeing cancelation rates in the high single-digit percentages compared to the mid-teen percentages experienced last year.<\/p>\n
\u201cThey\u2019re historical. They\u2019re not more than they\u2019ve been,\u201d said one TV network executive.<\/p>\n
\u201cIt wasn\u2019t a bloodbath. Options weren\u2019t at historic highs or anything. They weren\u2019t that bad,\u201d said a second TV network executive.<\/p>\n
\u201cFor Q2, the early indications look OK,\u201d said a third TV network executive.<\/p>\n
\u201cIf you look at them versus prior-year, it\u2019s like, \u2018OK, good sign.\u2019 I view them to be a positive sign,\u201d said a fourth TV network executive.<\/p>\n
Clearly, none of these network executives are crowing about the Q2 cancelation rates. But they aren\u2019t crying about them either. Instead they\u2019re taking some cheer in the cancelation rates being among the signals that the TV advertising marketplace may be starting to come out the other side of a depressing period that started last summer.<\/p>\n
\u201cI would call right now the most stable it\u2019s been in six quarters. I\u2019m not saying stable is good. It\u2019s just not getting worse,\u201d said the third TV network executive.<\/p>\n
The executives attributed the recent marketplace improvement to some advertisers\u2019 businesses either recovering or proving more resilient than expected. Spending from auto advertisers, for example, has begun to pick back up, whereas last year auto advertisers were among the most aggressive in canceling their upfront commitments and pulling back budgets.<\/p>\n
\u201cAutomotive was a freaking disaster [in 2022]. A lot of the options came from automotive. Now automotive is kind of\u2026 you know,\u201d said the first TV network executive, who made a so-so gesture with their hand.<\/p>\n
\u201cCPG is in a much better place. The supply chain issues have been rectified, and inflation issues have been rectified. The auto category is starting to bounce back. Eventually the insurance category will catch up to that,\u201d said the fourth TV network executive.<\/p>\n
Pharma and entertainment advertisers have also been bright spots for TV networks and helped to offset decreased spending from tech advertisers.<\/p>\n
\u201cThe clients that laid down their money [in the upfront last year] are still in fairly stable places,\u201d said the second TV network executive.<\/p>\n
Relatedly, while traditional TV\u2019s scatter market has been soft, it has firmed up a bit, with prices up by roughly 10% year over year in some cases, per TV network executives. More to the point, scatter pricing remains higher than the rates that advertisers secure in the upfront, so brands looking to continue to advertise on TV aren\u2019t exactly incentivized to cancel upfront commitments and redirect those dollars to the scatter market where networks sell the inventory unclaimed by upfront advertisers. Additionally, TV\u2019s direct-response advertising market has improved to contribute to the sense that the TV networks\u2019 advertising businesses are in a not-terrible condition heading into this year\u2019s upfront marketplace.\u00a0<\/p>\n
\u201cI feel like our toes aren\u2019t over the cliff. We might have like six inches there. There was a moment where we were doing the \u2018Whoa, whoa, whoa\u2019 and waving our arms trying to stay on the freaking cliff. We\u2019ve taken half-a-step back and are on a little bit sturdier ground,\u201d said the third TV network executive.<\/p>\n
What we\u2019ve heard<\/h2>\n
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\u201c[Advertisers are] playing it close to the vest. The scatter market\u2019s coming in later and later. It used to be there was a scatter market: \u2018It\u2019s the beginning of the quarter. The market\u2019s going. The money is coming in.\u2019 Now it seems to be more on a weekly basis, which is a little bit like digital.\u201d<\/p>\n
WTF are the U.S. Joint Industry Committee\u2019s measurement currency requirements?<\/h2>\n
Last week\u2019s Future of TV Briefing mentioned that the congregation of TV networks, agencies, industry organizations and Roku seeking to standardize TV and video measurement had released an initial set of requirements for third-party measurement providers. Here\u2019s a skit I made highlighting some of the requirements (the complete list is available here<\/a>). <\/p>\n\n