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Behind the Curtain: Insights from 2023's Upfront Week

Published: May. 26, 2023

This year's upfronts were anything but ordinary. Executive shake-ups at NBC brought into question the state of advertising currency. Paramount chose to opt out of the week-long event. And to top it off, protestors lined the sidewalks in solidarity with the writer's strike.

That's not to say the big week is typically predictable. In 2020, COVID obliterated any and all plans for in-person presentations. Then, in 2022, advertisers returned to the upfronts after a two-year hiatus. But 2023's upfronts have especially thrown advertisers for a loop, thanks to the triple threat of events just weeks before the big event.

While the writer's strike certainly threw a wrench into plans, big-name brands could still paint a clear picture of where the market was heading. Below, we'll dive into what we saw at this year's upfronts, what it means for the market and our recommendations for navigating the foreseeable future.

What Did We See?

One of the biggest overarching themes at this year's upfronts was sports — a vertical seemingly unaffected by the writer's strike. From Disney to Fox to Warner Brothers, everyone leaned into their sports ownership and the promising future of live viewership. "In what's been an otherwise rather lackluster ad market, sports is a bright spot," said WBD ad sales chief Jon Steinlauf to the Hollywood Reporter.

News programming was another focal point for publishers looking to fill the gap in content. Most of each news presentation focused on the election cycle and original programming. CNN's presentation, case in point, revealed three new series: Columbia, Tinderbox, and Spy Wars.

The ever-growing impact of the streaming era was another notable theme among presentations. Netflix, a major player in the streaming space, had its first-ever (virtual) upfront presentation. Fox treated its streaming platform, Tubi, as a separate entity by giving the free streaming provider a portion of its presentation. According to Ad Age, Marianna Gambelli, Fox's president of advertising, boasted, "To add to Fox's already powerful portfolio, we went all-in on AVOD," and noted that the service had grown 44% YOY.

eMarketer forecasts that, from 2020 to 2024, upfront CTV spending will grow from about 30% to about 40% of all CTV spending.

Chart representing US Upfront/Newfronts Connected TV Video Ad Spending

As streaming grows, advertisers are seeking new ways to consolidate their content. Warner Brothers announced WBD Stream, an all-in-one advertising platform designed to facilitate ad buying by putting all its inventory in one place. Similarly, Disney noted plans to combine Disney+ and Hulu content. And, of course, HBO Max rebranded to Max.

"The iceberg below the surface this week was the long-term structure of the TV industry. It's clear there will be consolidation among some of the companies. The loss of billions of dollars TV companies have run up -- trying to build streamers to challenge Netflix, Amazon, and Apple -- is not sustainable," wrote Dave Morgan, CEO of Simulmedia, on Media Post.

Looking to the Future: Our Forecasts

Now that the dog-and-pony show is over, how will advertisers navigate the market? Here are our predictions for the upcoming year.

Cross-channel will be increasingly important, and it's time to implement a cross-channel strategy. Many advertisers treat streaming and linear as siloed channels, but the overlap between the two is too large for advertisers to ignore.

Take Formula 1: Drive to Survive, which blew up on Netflix. A spilling fanbase significantly boosted the international racing series on other channels, including ESPN. The big takeaway? Viewership is evolving, and the line between streaming and linear is more blurry than ever.

Rather than think about viewership in terms of GRP and cost per point, consider the multiple touchpoints across a viewer's journey and how you can drive business across those points.

Sports and news will see less erosion than general entertainment. While general entertainment may be facing significant headwinds, sports and news are less likely to be impacted. Why? Sports are always in high demand, and the election cycle will attract more viewers to news programming.

This means sports, and news programs are likely to generate more impressions — and more demand from advertisers. This means sports and news are more likely to garner strong CPM inflation.

We can already see the effects of this. Yahoo! Sports reports that "looking back at the last 30 years of upfront data, the cost of reaching 1,000 sports viewers in the fall is likely to be around 8% to 10% higher than it was just a year ago."

Hesitation to spend in the upfront market will make this year's scatter market even more important. While some advertisers are ready to commit to spending in this year's upfronts, others are, understandably, more hesitant. eMarketer forecasts that US upfront TV ad spending will fall 3.6% for the 2023 season — a 5.0% drop.

How long are advertisers willing to prolong their upfront commitments? Advertisers fall into two buckets here. While some are ready to start spending, others are waiting to see if the scatter market may fare better.

In an interview with Digiday, Roseann Montenes, head of strategic audience solutions/partnerships and alternative currency measurement at A+E Networks, noted, "Some clients that we're talking to — [clients] that know they have particular KPIs that they need to check the box and know that they're getting into a better place with — are willing to start to have the conversation a little bit earlier, whereas you have another school [of advertisers and agencies operating under the mentality of] 'Let's wait and see; can we spend in scatter?"

Those looking to spend in the scatter market still have an opportunity to hit their campaign goals, but their strategies must be even smarter to succeed.

Navigating an Uncertain Future

Nervous about spending in the upfront market? It doesn't mean you have to miss your campaign goals. Instead, use a portion of your spending more nimbly in the scatter market.

How? It's possible, even easy, with Simulmedia's powerful TV+ platform. From sports to news and beyond, advertisers can take a more thoughtful approach to today's increasingly fragmented landscape with the only true cross-channel solution.

Ready to start? Speak to one of our experts.