Given supply and demand dynamics amid shrinking television ratings, it still makes sense for brands with big TV budgets to participate in the annual Upfront negotiating ritual. Unlike last year, the President of National Video Investment for OMD USA doesn’t foresee significant price inflation this time around.
“By and large, if you have a sizable amount of advertising dollars to spend in national television we try and get you into the Upfront, because history has proven it’s an advantageous position to be in,” Chris Geraci says in this interview with Beet.TV.
For a variety of reasons, some advertisers can’t make a long-term commitment for TV inventory. In those cases, Omnicom tries to structure shorter, multi-quarter deals if possible, according to Geraci.
Even with the arrival of digital publishers and their inventory, giving brands more choices of where to run their ads, supply and demand still dictates pricing during the Upfront. This is particularly the case when audience fragmentation and audience losses ultimately impact the available supply of gross ratings points.
“We actually saw a little bit of growth in last year’s Upfront in terms of advertiser spending,” Geraci says. “That combined with what was a pretty horrendous year in terms of ratings performance certainly produced a significant amount of inflation.”
He doesn’t expect to see similar TV budget growth in 2017, “But inflation is part of the deal when you’re talking about a supply and demand environment.”
Advertiser demand for better audience targeting beyond traditional age/sex demographics spawned the recently announced OpenAP consortium involving Fox, Turner and Viacom. Geraci describes the move as be “great” because it provides a uniform metric in the advanced targeting arena.
Asked if he expects to see more programmers join OpenAP, he doesn’t see why others would not. “You’re basically offering something to the agency and advertiser community that is going to be simpler to use, it will be easier to make comparisons,” Geraci says. “I don’t really know what the downside would be of not being part of it.”
When the subject turns to the continued emergence of brand-safe environments for video ads, he believes it’s going to be “shouted from the mountaintops” during the Upfront season. But he offers perspective as well.
“I think that there are still plenty of places in the online world where brand safety can be all but ensured,” Geraci says. “We’re talking about a very specific problem dealing with what is, for the most part, user-generated, non-professional content that has always been an obvious concern.”
This segment is part of a series leading up to the 2017 TV Upfront. It is presented by FreeWheel. To find more videos from the series, please visit this page.