The market for “advance” advertising sales for television is starting to move – and sooner than expected.
Just days after the networks wrapped up glamorous software offerings for executives on Madison Avenue, The Walt Disney Company is said to have written some work with at least one major media buying agency, according to three executives familiar with recent discussions. One buyer told the media that Disney was “ahead of the market.” In the industry’s annual pre-process, US television networks attempt to sell the bulk of their commercial stock before the next programming cycle.
One of those people noted that Disney’s candid conversations are “going very well” and that the company is “making great progress,” and is seeing “high demand” for entertainment and sports programming, live events and content aimed at diverse audiences.
The terms Disney might be doing business in isn’t immediately recognizable, but executives at both networks and various media agencies admit that the TV companies haven’t fought back for the massive price increases they won last year.
In 2021, the networks lobbied for increases of between 16% and 22% in the cost of reaching 1,000 viewers — a measure known as cost-per-thousand impressions that is essential to these annual talks between TV networks and Madison Street. In 2022, many of these people are suggesting that networks bargain for CPM increases in the medium to high single-digit percentage range, hoping that they can make money by paying a significant amount of upfront advertising commitments across streaming and line sites. Instead of forcing a portion of their deals to exorbitant rates of increase. One buyer suggested that if networks place a heavy emphasis on capturing volume, they may choose to relax some of their CPM requests.
Disney has a lot of highly desirable commercial warehouses for sale. The company has created a “huge squad” for ESPN’s “Monday Night Football” that will feature former Fox Sports hosts Troy Aikman and Joe Buck at the booth, and a second game-related show led by Peyton and Eli Manning. In addition to the NFL, ESPN also owns the rights to Major League Baseball, the National Basketball Association, and the National Basketball Association for dozens of games. Disney is also giving advertisers access to limited ad inventory in the Marvel series and Star Wars, along with other programs, working on a new ad version of Disney+.
At the same time, Disney isn’t immune to the ways technology has changed the way people watch TV. More people who make up the large audiences watching “Grey’s Anatomy” or “Good Morning America” have migrated to broadcasting their favorite “on-demand” shows at moments of their choosing. This dynamic is forcing large advertisers to distribute more of their money from prime-time television broadcasts to ad-supported broadcasting sites. This money can go further in broadcasting, where ad unit prices remain much cheaper than those in broadcast television. The competition for this part of the Madison Avenue pocket book is heating up. HBO Max presents from Warner Bros. Discovery also has limited commercial opportunities in an ad-supported version of the service, and Netflix has also indicated that it will soon be looking to release an ad-supported version of its service.
There has been some speculation among media buyers that Publicis Media, the media investment arm of French advertising giant Publicis Groupe, has struck some early initial deals. Publicis and Disney have been powerful partners in the recent past. Earlier this year, Publicis struck a deal with Disney to test new audience measurement systems due to be implemented by Nielsen later this year. A spokesperson for Publicis Media did not immediately respond to an inquiry seeking comment.
In recent years, the primary market has not opened in earnest until after the Memorial Day weekend. However, in 2021, advertisers’ interest in getting a steady stream of stock was forced to move more quickly. In 2021, Disney, Fox, and NBCUniversal were all working on deals, and some parts of their structure were quickly revealed after the holiday. Fox and NBCUniversal declined to make executives available to comment on their progress so far in 2022, as did two other large vendors, Paramount Global and Warner Bros. Discovery.
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