A postmortem on this year’s TV and streaming upfront ad market with UM Worldwide’s Marcy Greenberger
Oct 15, 2024
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Marcy Greenberger, Chief Investment Officer at UM Worldwide, delves into the changing dynamics of the TV and streaming ad markets. She highlights a significant reset in pricing due to increased streaming inventory, with rates dropping by 30% to 40% from major players like Disney and Netflix. Greenberger notes that this shift is favorable for advertisers, as sellers are now prioritizing overall commitments over price thresholds. She predicts this reset will have lasting effects on the industry, transforming how advertising deals are structured.
This year's upfront ad market experienced a significant reset in digital video pricing, benefiting advertisers with lower rates amid increased supply.
The rise of retail media networks reflects a growing trend for businesses to leverage shopper data, despite challenges in market saturation and transparency.
Deep dives
Creativity vs. Performance Marketing
The ongoing tension between brand storytelling and performance marketing is becoming increasingly pronounced as marketers face economic constraints. Businesses are challenged to communicate their value effectively amidst a crowded digital landscape, emphasizing the need for creative storytelling to maintain consumer relationships. Without additional budget allocation, brands must innovate within existing resources, leading to renewed calls for creativity in advertising strategies. This shift underlines the importance of compelling content that resonates with audiences to differentiate brands from their competitors.
The Impact of Retail Media Networks
Retail media networks have recently gained attention as businesses seek additional revenue streams. Companies like PayPal entering this space signify a shift towards utilizing shopper data for advertising purposes, yet many are still grappling with operational challenges and market saturation. The abundance of retail media networks raises questions about transparency and the true value gained from participating in these initiatives, with advertisers increasingly scrutinizing returns on investment. As the landscape evolves, retailers must adapt to the growing competition while ensuring they effectively leverage their data advantage.
Trends in the Upfront Ad Market
The recent upfront ad market cycle showed a softening environment with significant pricing resets, particularly in digital video. Advertisers are responding positively to lower rates, which have made it more advantageous to secure advertising space in a year noted for a lack of immediate demand. Platforms like Amazon and Disney have capitalized on the shifts by offering competitive prices, while traditional linear TV networks continue to struggle. With the rise of streaming services and increased supply, the market is slowly adapting to these new economic realities.
Measuring Advertising Effectiveness
The transition to using multiple measurement currencies is underway, but Nielsen remains the dominant force in upfront advertising agreements. While discussions around new metrics are increasing, many advertisers are still hesitant to rely on unproven data products, limiting their adoption in the marketplace. Current strategies are focused on developing a clearer understanding of how various metrics translate and how they can be efficiently utilized to maximize ad spend. The complexity of integrating diverse measurement systems means that keeping advertising costs in check will continue to be a significant concern for agencies and brands alike.
After a string of somewhat monumental upfront cycles since 2020, this year’s annual haggle between TV and streaming ad buyers and sellers was hard-pressed to prove its significance. And yet it did.
“The biggest shift or change this year is it was really a reset year from a digital video standpoint in terms of pricing,” UM Worldwide’s chief investment officer Marcy Greenberger said on the latest Digiday Podcast.
Disney and Netflix were among the more notable sellers to drop their streaming ad rates in this year’s upfront cycle. But they weren’t alone. In fact, given the ramp-up in streaming ad inventory this year with Amazon Prime Video’s entry into the market, seemingly all sellers were more focused on overall spending commitments than specific pricing thresholds.
“There’s just so much more supply that finally convinced the suppliers or the publishers to rethink what the pricing is there often in exchange for volume, but really saw a reset that benefitted advertisers tremendously,” Greenberger said.
And that reset is likely to have a legacy that could outlast these latest upfront deals. In some cases, streaming ad sellers dropped their rates by 30% to 40%, according to Greenberger. “I don’t know that I see another massive reset [in streaming ad pricing in the future] like we saw this year,” she said.
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