Procter & Gamble, said to be the world's biggest advertiser, is abandoning upfronts, the annual programming showcases for media groups, to negotiate directly with television networks.
The consumer goods company says it now relies less on media agencies.
Media groups use the upfronts to sell inventory for the next programming period but pressure for change is coming via the current climate of uncertainty created by the COVID-19 pandemic.
“We almost always end up buying too much," says Marc Pritchard, the chief brand officer, speaking at an industry conference in the US.
"Buying too much inventory is inefficient at best, and at worst, leads to excess frequency through heavy ad loads in programs—annoying consumers and wasting money.”
Pritchard says upfronts are used by media companies to gather information on budgets, using that to keep rates higher.
However, he says agencies still have a role.
“At P&G, we’ve taken control of when we negotiate and buy TV media," he says. "To level the playing field, we negotiate directly with as many as possible. Our agencies help us and have an important role as contributing partners, but we are in the lead.”
In Australia, NIne Entertainment was the first of the networks to present its upfronts for 2021, going early in September when it usually is in October. Ten is scheduled for the middle of next month.
The Association of National Advertisers (ANA) in the US -- led by an advisory group including Bank of America, Mastercard, McDonald’s, Nestle USA, Procter & Gamble, and Unilever -- is also pushing for changes to the upfronts system.
“While there are benefits to the upfront, it remains an antiquated business system that needs reform," says Pritchard, speaking as the chairman of the ANA.
"We need far greater marketplace transparency throughout the media system to enable choices to drive out media waste, improve effectiveness, and dramatically elevate the consumer experience. Only then can we achieve true media transformation and reform.”
ANA CEO Bob Liodice says the marketing community must revisit the media buying environment and develop changes that will accommodate the new reality.
"It is a fundamental imperative to include the evolution of the upfront among those legacy systems that need change and improvement," he says.
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