Michelle Monaghan, Leslie Bibb and Carrie Coon in 'The White Lotus' in HBO.
Courtesy: Fabio Lovino | HBO
Media companies are looking at generalized economic uncertainty as their annual tone begins for advertisers and vendors.
This week, inherited entertainment giants, including Comcast Nbcuniversal, Fox Corp. and Warner Bros discovery. He will present to advertisement buyers about why they should commit money with their next sports slates, entertainment and news programming. Netflix and Amazon Prime video is filling the field with its seconds annual upfronts. Global Paramount maintained his presentations with advertisers and agencies last week.
This year, bets are high since the main marketing officers in all brands formulate contingency plans for a variety of results with respect to rates, inflation, consumer's feeling and other macroeconomic changes that could affect their expenses.
The overview of evolving costs adds to existing winds that face the media industry: payment television subscribers are fleeing for transmission options. And while the transmission has begun to achieve profitability for some companies, services have not yet proven to be as lucrative as the traditional package. Meanwhile, competition is rigid since digital and social networks capture most advertising dollars.
He will try another year of cloudy fins for concerns after the Covid pandemic and Hollywood attacks. Last year showed stabilization in an advertising market, and executives had previously said that CNBC 2025 was expected to be another year of normalization.
Instead, the industry is preparing, and executives are adjusting their tone at the moment.
“The media become more complicated in the panorama defined by inflation, the regulatory uncertainty, the change of market terms, and which serves as a backdrop for the season,” said John Halley, head of Sales of Paramount's ads. “In moments of uncertainty like this, there are very few places that offer the scope, brand safety and the impact of the Paramount portfolio. That is an important point in a market like this.”
In interviews with the main bosses of ads among the inherited media companies, executives promoted safe content and reliable hearing metrics in an effort to demonstrate the importance of advertising during uncertain times. Many executives said they have not yet seen a “material” setback in advertising spending, as he had feared.
The main categories during the Upfronts is live sports, they said. Live events, such as awards programs, and the so -called “Unmissable Television” will also be an important factor in conversations.
“Sport is having a live halo [TV] In general, “said Gina Reduto, executive vice president of advertising strategy in NBCuniversal.
Although General Entertainment has been behind sports in the grades, shows such as “The White Lotus” by Warner Bros. Discovery, which generated a constant audience and controlled the cultural conversation weekly, stands out.
“I think everyone knows that, regardless of what happens, they still have to sell, they still have to move [product]”said Rita Ferro, president of Global Disney advertising.” They say: “We still have to deliver products and services to our customers, and we have to do it in the best possible way.” That is to understand the parameters we are dealing with and what are those implications in terms of prices. “
Make plans
The big brands that in some cases have been left out for years the television frenzy about the largest American sporting event, the Super Bowl, return on Sunday and spend large prices record of ads. They have been a couple of irregular years marked by the restriction of the Pandemic era and political polarization, but the American football championship offers an increasingly unmatched audience too large to let it pass.
Olivier Douliery | AFP | Getty images
The concerns that President Donald Trump's trade war could increase prices have not yet translated into a setback in advertising spending, media executives said to CNBC. Quarterly reports for media companies have not yet reflected any decrease in spending due to tariffs, although the decrease in the linear TV package has weighed finance.
WBD has not seen “any material cut” at its advertising volume, said Ryan Gould and Bobby Voltaggio, the company's presidents on advertising sales in the United States.
“The feeling in the market is not really indicative of what we are currently seeing. But, obviously, the future state of impact has not yet been known,” Voltaggio said.
Jeff Collins, president of Fox's advertising sales, echoed his teammates: “All customers we are talking about obviously has their stage planning for different things that could happen. But I think that one of the important lessons they learned during Covid was not to react excessive to uncertainty.
“Obviously you need to have a plan, and everyone has plans,” said Collins. “But until there is some type of tangible impact on their business, we have not seen anyone who really seeks to go back.”
Ferro de Disney said his team has spent additional time with advertising partners in recent months, discussing several scenarios in which tariffs could affect different categories and products. He added that the marketing directors with whom he has spoken operate in what he called “war rooms.”
Ferro reported specific conversations with a mobile phone company (which refused to identify) that highlight the volatility of commercial policy: the telephone company in mid -April decided to make an order for approximately $ 1.5 million in advertising for the month in light of the rate exposure. That weekend, the Trump administration exempted smartphones and other rates scheme devices.
“Then, on Monday, that agreement that disappeared on Friday was at order,” Ferro said.
“It is literally in real time what is happening. I think there are many scenarios for which they are happening and is very real time,” Ferro said.
The EMARKETER data firm estimated that the traditional television advertising spending during the subfants will decrease by $ 2.78 billion and $ 4.12 billion, depending on the severity of the tariff impact. However, spending on the transmission on these annual discussions will be more stable, with Emarketer waiting for a growth of $ 1 billion in that category. Media companies sell advertising for both platforms together.
This gives advertisers the advantage when negotiating prices, with the exception of sports content. It is likely that companies that are most affected by the loss of payment television subscribers will be willing to reduce their prices, said Jonathan Gudai, CEO of Adomni, a digital advertising platform.
The EDO advertisement data firm said that there has already been a setback on the estimated advertising expenditure in the automotive and automotive consumption sectors and Trump's announcement on the rates.
At the same time, consumer concerns in prices that have soon translated into the highest prices have resulted in greater advertising effectiveness. For example, household appliances brands reduced the estimated expenditure by 30%, but consumers' response capacity increased by 77%.
The media executives, who refused to discuss prices, all data from companies such as EDO are key in discussions with advertisers, which are increasingly sought to be directed and specific instead of the size of the audience.
“Advertisers say: 'I want to buy very specific audiences.' That is why the results are so important,” said Kevin Krim, CEO of Edo. “You must have a very granular vision of what you are willing to pay.”
Upfronts are dead! Long Live the High!
Ad Paramount's Sales Chief John Halley speaks during an event in advance.
Getty images for Paramount
All these factors play in a recurring question for the advertising market: Are annual upfronts remain important?
“I have been in business for about 30 years and the question of do we still need the in advance? [presentations] It comes every year, “said Collins de Fox.
The answer this year for traditional media giants can be: more than ever.
“That is the last moment in which you want to leave advertising because, you know, you must try more, not a kind of capital,” Krim de Edo said.
Krim added that the need for flexibility makes data in real time: “last year's model cannot be used.”
He also said that he can change even more advertising dollars to the programmatic purchase, which puts media companies in a “level playing field” with digital companies such as goal, Amazon and Google. Despite being giants in advertising space, these technological companies have begun to reveal the beginnings of cracks in their advertising businesses.
Annual presentations could also block the purchase for some of the consistent favorite categories.
NBCUNIVAL NBCUNIVAL told CNBC that blocking ads during the UPFronts provides “an opportunity for advertisers to guarantee that they have access to things they know that it really drives sales.”
Earlier this year, Mark Marshall, president of Advertising and Global Associations of NBCuniversal, said in a letter that mapped the next list of sporting events of the company, including the Super Bowl, the Olympic Games and the World Cup, as proof of Upfronts's utility.
“I think that from a perspective of the advertiser they still value the ability to block the franchise positions they want to have, block them at desirable prices and have flexibility,” said Collins.
Disclosure: Comcast nbcuniversal is the CNBC parent company.
