By Selin Dursun, Katrina Woo, & the STEBA Executive Board
For us, late Spring signals approaching deadlines and graduation, but in entertainment – it's upfront season! What are upfronts? Each major TV network sets a time and place in the star-studded annual TV upfront week in New York City to pitch their seasonal television lineup months in advance, prompting advertisers to bid for the ad spots that will air in the following television broadcast year. Following the pitch, sales executives from the networks and advertisers meet for negotiation and billions of advertising dollars are exchanged. Upfronts – as the name suggests – allow networks to secure their ad slots and lock in the prices for the upcoming season.
Ad money is crucial for networks to support their cast, crew, and productions, especially as content costs have grown more expensive over the past few years and as users become more price sensitive to changes in subscription fees. In essence, advertising channels a huge portion of the money. And ultimately, as money is the fuel for all networks to execute their business strategy and goals, upfronts are a great way to build strong relationships between advertisers and networks to facilitate financial growth.
But that is not all…there are also Newfronts. Recognizing the change in the way audiences consume content with new digital avenues, Interactive Advertising Bureau (IAB) runs Newfronts where companies showcase their upcoming programming and new viewing formats to ad buyers. The IAB and the founding partners of Newfronts like AOL, Google, and Yahoo picks the participants such as Amazon, Meta, TikTok, and Buzzfeed (to name a few) to hold annual Newfronts featuring their understanding of industry trends and how they are uniquely positioned to reach audiences. Newfronts focus more on digital video and were initially created as “anti-Upfronts” for the industry to deliberate on the ever-changing landscape of digital content. Yet as the business of digital content grew more profitable, Newfronts started to resemble Upfronts with media conglomerates using their presentations as a way to promote digital content to the advertisers, marketers, and press in the audience.
Recently this week, NBCUniversal gave its annual Newfront presentation regarding its streaming platform, Peacock. Benefitting from its Universal movies catalog, executives highlighted the recent theatrical releases on the streamer such as M3GAN and Cocaine Bear are finding success amongst audiences and advertisers. “When a Universal film comes straight from theaters to Peacock, that experience often generates a larger ad-supported audience than some of our competitors can offer advertisers in an entire month” Peter Blacker (EVP, Advertising & Partnerships, NBCUniversal) stated. Two thirds of Peacock’s 22 million subscribers have seen a recent theatrical Universal movie and 95% expressed a favorable opinion of the ad experience during movie streams.
Ahead of its upfront pitch to advertisers on May 15, NBCUniversal also announced new ad formats diversifying their ad portfolio: Spotlight+, Marquee, Power Break, and Must Shop TV. Spotlight+ provides unique ad placements to maximize the impressions and brand awareness that can be communicated to live mass audiences through ad placement on streaming, linear, and third-party platforms. Under the Spotlight+ advertising division are numerous different ad styles. This includes Marquee ads aiming to deliver ads at contextually relevant content moments to provide a non-intrusive and seemingly organic ad experience for users. For example, in live sports ads and brand sponsors will be placed on scoreboards. Also striving for a non-intrusive ad experience, Peacock will be introducing Power Break, a type of pause ad which appears when a user pauses content. Finally, Must Shop TV allows viewers to be able to purchase products whilst streaming to enable purchase touchpoints beyond streaming.
Lesson: Networks organize their own upfront and Newfront presentations to pitch their seasonal programming in advance to lock in advertising revenue that fuels all networks through selling ad spots. As consumers become more sensitive to the changing pricing and streaming landscape in entertainment, the industry needs to be creative and adaptive to thinking about how ads can be presented in a digestible and non-intrusive way. Additionally, as advertising becomes a key way to monetize digital real estate on platforms, diversifying the way in which ads are delivered gives platforms a competitive and well differentiated edge when it comes to the value networks can offer advertisers.
If you’re interested in reading more on these topics, here are some additional resources to check out:
Peacock’s Ad Portfolio (different ad formats)