Upfront Pricing

Categories: Metrics

This is the way in which television advertising used to be sold.

Back in the day, television networks would have what they hoped felt like a revival (hallelujah). They'd invite their top 100 or so buyers of ad time (the CMOs of beer and car and insurance and phone companies, and the like) to New York for a wild and crazy few days, when they'd review last year's hit programs and then show off their slates of new programming for the new year.

The hope was that, when all the buyers were put in the same room and all got excited about what great, high ratings these new shows would get...they'd all bid against one another to keep an umbrella of high prices alive and well in the upfront prime time television season.

Prime time was important, as it set the pricing for everything else. That is, everything was some less-than-100 percentage of whatever prime time 30-second spots cost. Why? Because it's cheaper to get a message out when you can go to one place to do so, rather than having to buy 400 spots, not really sure if anyone is even watching at 2 am, much less paying attention to the ads.

So the upfront pricing system referred to the advance bids that networks received "up front" when they offered ad time to their buying public.

And then along came VCRs and DVRs and time shifting and commercial skipping and the internet and Netflix and many other assaults...and now, the whole TV ad world is in complete disarray. No idea where or when or how they hit the bottom. But you can bet that, if that bottom likes being hit, it'll be a new reality TV show with a very different kind of...upfront.



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