Marketers Should Adjust Their Budgets as Streaming Takes Over the Upfronts

Editor’s note: This piece is part of our Columnist Network series, which explores the tactical thoughts and actions from Adweek’s community of high-level experts. Today, Roku’s Kristina Shepard lays out new challenges posed by the TV upfronts as they are redefined in unprecedented ways. Below, she continues making the case for streaming as a viable alternative for ad spend. The linear upfronts first began 59 years ago and have since become synonymous with celebrity-led presentations taking place at top New York venues, such as Radio City Music Hall and Lincoln Center, only to be followed by lavish parties and late-night negotiations. Now, in the era of Covid, we can all agree—the upfront as we know it looks startlingly different. Started by ABC in 1962, the upfronts were less about filling ad slots and more about using advertisers as a focus group for their fall lineups. To understand the purpose behind the first upfront, we must remember why the fall TV schedule was created. Networks decided to debut their best and buzziest shows in the fall to help the auto industry promote new models for the following year. Six decades—and many a rate increase—later, here we are. While the upfront has evolved over time, it’s fair to say that there have likely been more changes in the past few years than ever before in its history. This year, in particular, we saw agencies and marketers publicly advocate for change and shift a larger percentage of their budgets (in some cases, 20%-30%) away from linear and into other mediums, most specifically TV streaming platforms. The transition we’re experiencing most predominantly this year has been a slow but certain evolution, accelerated dramatically by shifts in viewership due to Covid. In the past year, broadcast primetime ratings have declined by as much as 21% and live linear tentpole events have seen double-digit decreases in viewership, creating historical changes to programming schedules, perhaps best evidenced by the removal of the Golden Globes from its annual slot on NBC. Just as viewers have communicated their preferences more loudly over the past 18 months, advertisers are recognizing this shift more clearly than ever via their investments. The linear upfronts exist so marketers can lock in their budgets at the most efficient pricing, all while ensuring reach against their target demos. As the median age of the top three broadcast networks has risen to 60, rates have risen as well, thus creating challenges for clients. In addition to the evolution of linear platforms, marketers also have better alternatives than ever before. Linear networks are standing up to direct-to-consumer channels, which contributes to why TV streaming platforms have reach that rivals the golden era of linear. Streaming also allows the opportunity for marketers to target an audience on a 1:1 basis, all with the added perks of efficient measurement, flexibility, creative ad units and branded content capabilities. Marketers felt the urgency to close early deals with TV streaming platforms like Roku because they recognized the appeal and shifting trends. They now view streaming as the No. 1 place to reallocate those dollars that linear can no longer fit due to declining supply or that potentially come at hefty increases. In the nearly 60 years since the first upfront, marketers have never seen a more practical alternative to linear, bringing a completely new dynamic to negotiating tables—or videoconferences—across the country. This year seems to be the turning point, as prior to this year, many could argue that little had changed. While upfronts will continue to evolve, the need for marketers to lock in their budgets early, in exchange for the best value and benefits, will never go away. What will change is how and, most importantly, where they’ll allocate their dollars to ensure they’re reaching their target audiences as efficiently as possible. This is the year marketers have begun to really buy TV like they watch TV, and that will never be the same. Upfronts Week 2021’s Winners and Losers