Why Scatter Is a Safer Bet Than the Upfront

Television’s '16 -'17 Upfront is poised to bear sweeter fruit for national broadcast and cable networks. Less certain is the quality of the produce that marketers will enjoy.

Brand marketers, participating in the Upfront and reacting to the scatter market premiums they’ve endured this season, will look to secure the volume GRPs they need at the prices they can tolerate. When an Upfront aggregates all those marketers seeking price certainty, the result is more buyers demanding greater quantity of impressions. The dismal science of economics teaches us that the expected result is a magnitude price increase for GRPs that bucks the trend of the past few years.

Enthusiasts of traditional media may claim that TV Advertising is back. Considering announcements by the likes of NBCU, FOX, and Viacom on their packaging new data resources and audience targeting with their more typical content-centric offering, enthusiasts may further claim that TV is better than ever.

And they’re right. TV advertising is better than ever.

But that doesn’t mean that marketers’ plans to unload media budgets into the Upfront is an especially good idea. Committing significant budget in order to secure price certainty bears hidden costs.

The first hidden cost is sacrificed target audience reach from audience fragmentation.

As in years gone by, marketers will make their bets on which content will attract their audiences using a mixture of culture and gut judgment. The sellers will guarantee that for a better CPM they will drive empathy and authenticity through contextual alignment with their programming. Unsurprisingly there will be a few hit shows and lots of great sports programming. But for every show that that doesn’t pan out, marketers’ dollars will be put into more and more make-goods. This will inevitably increase frequency and decrease the intended effective reach.

In order to mitigate the impacts of audience fragmentation during the 2016/17 television season marketers will need to take a close look into the effective reach their upfront dollars amassed historically. The best way to do this is to uncover the amount of frequency versus reach that their guaranteed GRPs generated and for what cost. Market Insights, a free online database of national linear TV campaigns, can help marketers with this task.

The second hidden cost is the foregone opportunity to own the change of how TV ads are valued and measured.

Now that data-driven television advertising directly measures TV’s impact on sales, marketers can measure the return on ad spend that Upfront pricing has versus Scatter pricing. Many marketers will be surprised to learn that what might seem to be a lower Upfront CPM is actually not driving as much unique reach, or sales, as a Scatter CPM due to the bundled nature of inventory packaging.

Savvy Upfront sellers will do just enough to appease returning marketers on these hidden costs and to assert that the data innovations they’ve bundled with their content-centric sale represent the solution marketers seek. Upfront inventory packaging will be “premium” content led and then packaged with “non-premium” programming that will fill in the GRP goals.

Scatter inventory, on the other hand, will be data-driven and business outcome-focused. It will be packaged to satisfy all stages of the funnel – from awareness to consideration and conversions to sales. It will be sold based on audience data beyond the demo and will be measured on more digital-like metrics such as cost per unique reach, cost per conversion and return on ad spend. This will clarify, and in most cases justify, any potential increases in CPM pricing by measuring its impact on what the marketer is truly interested in – business outcomes.

The need to make TV dollars work harder is more important now than ever. With the amount of fraudulent and robotic activity that is prevalent within the digital advertising ecosystem, marketers’ effective reach is decreasing while their effective costs are increasing.

In a world where audience attention is harder to capture and competition within a category is getting more intense, television advertising will continue to demonstrate its capacity to be efficient and effective. Thanks to better data and more transparency marketers are in a strong position to leverage the past to change the future, not just make bets on it.