20 May 2014 | Blog
There’s been some chatter around this year’s Upfronts about how long the Upfronts will continue to exist in their current form. Will programmatic selling remove the need for the upfront buy? Is the age of the direct sale dead?
We don’t think the TV sales staff has anything to worry about. The Upfronts aren’t going anywhere any time soon. They serve an incredibly important purpose for major brands, offering them stability and the ability to plan out their fiscal year in a rational fashion. Trends and seasons may come and go, but it’s a safe bet that Coca-Cola is going to need TV inventory in prime positioning, and they’re always going to be willing to pay to lock that in. These brands and their agencies have long term relationships with their counterparts in media sales, relationships that they value for the trust and experience that has built up over the years. TV advertising is an incredibly effective medium, and there isn’t actually that much to gain by rocking the boat on the upfront inventory. The long-term strategies of big advertisers require locking in good inventory in advance.
Where programmatic is changing things is in the spot and scatter markets. This inventory was never sold through the upfronts. Its main advantage is tactical, not strategic—it allows advertisers to extend their reach and to react quickly to changing market conditions. Programmatic audience-buying just increases these advantages. Adding audience data allows brands to extend the reach of their upfront buys into specific consumer groups. Next-day reporting allows decisions to be made more quickly, and automation makes the timely execution of these decisions possible. Programmatic TV advertising doesn’t replace the Upfronts, it complements them.