This year, the annual negotiating bonanza arrives while marketers consider how best to shepherd their budgets through an ongoing economic crisis. As such, they’ll likely be taking more time to consider the wares on offer – and potentially spending less overall – according to six media buyers that spoke to Digiday.

“You’re going to start to see a little bit more hesitancy, a lot more need for flexibility,” said Deanna Mulkeen, head of media investment at Wpromote, before adding: “We may see potentially flat to lower outright commitments.”

From the impact of President Donald Trump’s trade war upon their businesses to falling consumer sentiment, there are solid reasons for marketers to be wary of tying themselves too closely to a major media investment. If another economic landslip occurs, they don’t want to be married to a spending commitment they can’t get out of in a hurry – even with the major TV companies striving to offer more flexibility to those commitments.

“Uncertainty around economic conditions have certainly impacted the way brands see the market,” said Jason Lim, newly hired chief media officer at Assembly North America.

Sources indicated that client caution would probably translate to upfront negotiations stretching farther into the summer than is typical.

“Usually people try to wrap up things around the Fourth of July holiday,” said Juliet Corsinita, head of convergent video and audio at PMG. “I don’t think there’s going to be as big of a drive to get that done so fast.”

‘Sports will be robust – and everything else will be down’

There are likely to be exceptions to that trend, especially for live sports. Coverage of the NFL, college football, NBA and NASCAR has become a major source of appeal for embattled broadcast networks’ pitching to brand advertisers otherwise unable to reach mass audiences. This year, sports’ safe bet will be even more attractive to advertisers searching for certainty – and streaming and linear inventory set against big-ticket sporting moments is likely to be snapped up.

“Typically, in these kinds of environments, clients will commit to the ‘must-haves’ and save budget for flexibility,” said Kasha Cacy, chief media officer at agency Known.

“Sports will be robust and everything else will be down,” predicted Corsinita. 

In fact, negotiations between broadcasters and agency holding companies around some sports properties have already begun. “Conversations with partners, particularly around sports, are already underway,” Cara Lewis, chief investment and activation officer at Dentsu, told Digiday in an email; she declined to say which sports inventory was on the table.

Compounding the situation for publishers is that brand advertisers looking for places to put their video dollars have plenty of destinations to choose from – and plenty that are cheaper than linear TV.

Digital video will account for 58% of overall digital ad spend this year, per an IAB projection.

‘Flexibility is critical’

The importance marketers are putting on flexibility threatens to undercut the entire premise of upfronts season, a period when publishers make their finest wares available at a relative discount, in exchange for binding agreements inked months in advance. But it’s a dynamic the industry has seen before, during the 2008 and 2020 recessions.

“Anytime there are factors that agencies and networks are at loggerheads over this can lead to upfronts being drawn out,” added Alicia Weaver, vp of media activation at Mediassociates.

Drawn out decision-making doesn’t necessarily mean advertisers will collectively spend less on TV than in previous upfront seasons. Brands that hold off from the dotted line in May and June might end up shelling out further down the line in the scatter markets (the industry’s term for piecemeal investments made quarter to quarter outside the upfronts season), though that won’t be much consolation to publishers concerned about cash flow.

So, what will marketers and media buyers be looking for in order to unlock investment? For most, flexibility in the form of easy cancellation clauses will be at a premium. “Flexibility is critical and that will also be a focus of our discussions, along with driving efficiency and value,” said Weaver.

According to Wpromote’s Mulkeen, more clients might consider committing dollars to programmatic CTV deals that enable them to chop and change the precise inventory their ads run against later down the line, rather than direct deals that bind them to a specific show or media property.

Jeff Green, co-founder and CEO of The Trade Desk, told analysts during the adtech’s earnings call last week that he expected programmatic spending to rise during the spring market. “We anticipate that this upfront will be a little bit weaker for linear and a little bit stronger for programmatic and digital as a result of the uncertainty that the world is facing right now,” he said.

They’ll also be looking for publishers to pack as much meat into their sandwich as possible – for example, CTV homescreen ads or media partnerships with creators, elements that provide “surround sound moments” for clients, as Mulkeen put it.

Each of those represent compromises that publishers and broadcasters would rather avoid. But a delay could cost them too, if marketers choose to hold spending back until much later in the year.

“If there is ‘must-have’ inventory in Q4, maybe you buy that during the broadcast upfront… but maybe you save other inventory for the fall when the economic picture is potentially clearer,” said Cacy. “You will need to hedge your bets.”

Seb Joseph contributed to this report.

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