Today, Procter & Gamble chief brand officer Marc Pritchard is challenging the status quo of the annual TV Upfronts system, a $21 billion marketplace that itself is undergoing a transformation. P&G, he said, will work outside of the system whenever possible, and negotiate directly with the networks.
At the ANA Media and Measurement Conference, held virtually, Pritchard called the Upfronts—in which advertisers gather in New York each spring for presentations from television networks and can then purchase ad inventory for the next TV season—”antiquated” and a playing field that is not level for marketers in particular.
Pritchard said the system as it stands today puts the networks at an advantage. To register for the Upfronts, marketers must provide spending estimates to media agencies, which then provide that information to the networks. Because the networks are equipped with those estimates, Pritchard said, they’re able to price inventory accordingly—despite what their ratings and viewership numbers may actually end up being.
“Despite persistent ratings declines every year, TV media rates go up, appearing to defy logic,” Pritchard said. “But it’s actually quite logical because of what a media agency leader once bragged to me about when pitching the agency’s capabilities. This person said they achieved ‘information asymmetry.’ In other words, whoever has the most information has an advantage. And year in, year out, the media providers have ‘information asymmetry.'”
The reason marketers have continued to participate, Pritchard said, is out of habit and a fear of not having the advertising options a company may desire later.
“For marketers, this system makes little sense, yet every year, we march to the Upfronts and rush to buy as much as possible as soon as possible so we can to get the best ‘bulk deal,'” he said. “A better name than the ‘Upfronts’ might be the ‘FOMOs.’
Pritchard said that in an effort to challenge and change the status quo, P&G has moved to doing more deals directly.
“Our agencies help us and have an important role as contributing partners, but we are in the lead,” he said. “We give and get the information needed to make decisions that create value for P&G brands and for the agencies and for the media providers. It’s not about winners and losers—it’s about a level playing field to constructively create value together.”
Pritchard also spoke of P&G’s prioritization of investing in programmatic digital advertising with the aim of democratizing the digital ad marketplace, allowing smaller players to break through. The hope is that the system will move to become “a transparent and level playing field, where all players—digital and TV alike—participate in cross-platform measurement,” he said.
P&G has already made major moves in that direction, particularly in China, where 90% of media spending is digital and over 80% is in programmatic. Stateside, Pritchard said that P&G is investing in programmatic more than any other media, with double digit growth.
This is not Pritchard and P&G’s first call for change to the Upfronts—he spoke on the subject earlier this year. P&G spent more than $6.8 billion on advertising in 2019, making it the world’s largest advertiser.