Planning Ahead for US TV Upfronts for Healthcare Marketers

Joe Warren, EVP, Media Investment

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.