Planning Ahead for US TV Upfronts for Healthcare Marketers
May 6, 2021
With the traditional Upfront TV buying season coming next month, this is a good time to start strategizing. This annual preview of upcoming content meant to entice advertisers into signing on has had significant upheaval due to the pandemic. It is looking as if it will continue to be a challenging market for advertisers (and why not, given everything that is going on!).
Last year’s Upfront was unsuccessful by most measures with TV commitments reportedly down anywhere from 15-20%. Marketers in the travel and entertainment industries had little confidence in the market as uncertainty and economic downturn due to the pandemic greatly impacted their business, and pulled back their marketing dollars. As we look forward to 2021 we see a very different marketplace forming but perhaps one that will be just as challenging to navigate.
The most recent advertising forecasts for 2021 from the major holding companies have increased recently with GroupM reflecting the most aggressive view of a strong market return with advertising growth estimated at 9.1%. This is huge increase in a market that is valued at approximately $140 Bill.
On the demand side of the equation, we are seeing the percentage of vaccinated Americans increase rapidly, early indications of a strong job market recovery and for many brands more market confidence as the US economy starts to open up. Television networks will be entering the marketplace with a level of confidence in their negotiating position, given the economic tailwinds at their back.
On the supply side of the equation, the data is very interesting. The pandemic has allowed audiences to increase their screen time, and we are seeing more video consumption overall. But traditional TV share of viewing time continues to slide while streaming services are increasing. From a TV ratings perspective it is disappointing to note that because of an inability to maintain TV production during the pandemic, we are going to see fewer new scripted series and less episodes of those that have been produced for TV. To summarize, the audience is drifting away to streaming services, and this is compounded by the potential of less new exciting programming to bring them back. With strong demand and reduced supply we can expect prices (cost per thousands) to increase some 15-20%.
For some healthcare advertisers, there is a silver lining, as marketers can use the advantages of digital technologies to find and impact niche target audiences through addressable and connected TV. An approach of precision at scale enables smart marketers to target highly valued patients through narrowcast TV approaches and minimize wastage of broadcast TV.
However, healthcare advertisers purchasing large segments of the US population on traditional network and cable TV are going to be facing significant media inflation as both the demand side and supply side of the equation is against them. As difficult as it may be to swallow an increase in pricing of 15-20%, the scatter market is expected to be even more crowded. Ultimately, jumping into the Upfront negotiations, taking advantage of guaranteed audience impressions, getting access to the new shows that are available and being able to buy into the major sporting franchises, such as NFL and for this year the Olympics, makes sense.
Nevertheless life sciences advertisers entering the Upfronts will need to be much more strategic than in the past. Advertisers will need to try to offset some of the TV inflation impacting their budgets, looking at alternative media vehicles to drive awareness. Our view is that the social networks, with their increased video capabilities and huge audience growth after the pandemic lockdown are well placed to pick up some of the slack in addition to addressable and connected TVs.
Given all of this, it certainly makes sense for healthcare brands to reconsider all their options and to very carefully review their audience segmentation, to define audiences as accurately with as much precision as possible to take advantage of digital solutions. CMI Media Group’s Empower™ platform is an industry-leading platform designed to understand your audiences as individuals, to understand their behaviors and media habits all in a HIPAA-compliant manner.
As the TV upfront looms and has the potential to be the most expensive TV market in recent history, it probably makes good sense to discuss your approach to consumer targeting.