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TV upfronts are a big deal and are worth millions in negotiations to network media buyers and TV networks. Every summer there is an upfront in which large inventory pools are sold by station networks to advertising agencies in order to ‘get the best deal’ for national clients. Traditionally the TV stations sell about 70% of their national TV inventory in the upfront selling period which starts in June, with cable TV networks making upfront deals for around 50% to 60% of their inventory. This year OTT provider Roku came to the table, and they came with industry changing standards:

“Unlike TV networks, Roku says it is much more flexible when it comes to marketers adjusting their media buys. Roku offers a two-day cancellation option. For traditional TV, marketers typically can cancel only 25% of their buys in the first quarter and 50% in each of the second and third quarters — and must do so with a 60-day advance notice.”

Roku as a Disruptor

Linear TV is already under immense pressure to compete with digital, impression-based buys. The digital space is advantageous for TV marketers because of all the analytics and data that can track spots down to the household and viewers within those households. Linear TV and cable providers have taken a big hit in ratings because of the rise of OTT viewership (that has trackability) during the COVID pandemic. As audiences fragment further linear TV and Nielsen data sources are trying their best to figure out a way to measure their audience viewership more accurately. Not only is Roku disrupting the Linear space but now the upfront negotiations.

What Makes Roku Such a Big Player in the Space?

“Roku touts OneView, its ad buying platform, as the first platform to feature Nielsen-measured reach and frequency reporting across all four screens: linear TV, TV streaming, desktop and mobile.”

“One of the immutable laws of television holds that people between the ages of 18 and 49 are the most desirable viewers to reach. This year, the networks want to loosen that definition.” 

Millennials were the first generation to really break up with linear TV, and the Gen Zoomers are following that trend. It’s evident the death of linear tv sales is happening in real time.

As Audiences Fragment so does the Advertising Inventory

NBCUniversal has made no secret of the fact that it believes streaming video represents the new primetime. Ad buyers say the company is in some instances seeking eye-popping increases of around 50% in CPMs – the cost to reach 1,000 viewers, a unit that is central to the annual upfront negotiations – for ad on Peacock. The CPM rates for HBOMax are said to possibly be even higher.”

Gone are the days where upfronts where between the 4-6 top station networks. These negotiations will continue to see more and more big players in the OTT space participate. There may even come a day where prime linear TV inventory is offered as ‘added value’ to an OTT campaign.

Clients, whether national, regional, or local, need to look to their agencies to place their messages inside OTT and CTV now, if they want to capture a lion share of the younger generations. If your agency isn’t well versed in both forms of media, then it’s time for you to look for another agency.