What’s Really Behind P&G’s Call to End Upfronts
Procter & Gamble’s Chief Brand Officer Marc Pritchard made headlines across the ad world last fall when he spoke out against the age-old practice of upfronts, an annualized, discounted approach to bundling TV buys in which brands contract to buy an ad spot at a fixed timing and price up to 12 months in advance. Pritchard announced P&G would not return to this antiquated practice, even after the pandemic.
Marketers Value Predictability in Outcomes Not Cost
When traditional cable TV was the primary broadcast channel marketers relied on annual marketing mix analyses to inform their annualized commitments to TV, with little or no data about the projected profitability of those investments.
Pritchard smartly pointed out that the upfront gives agencies and networks the information edge on marketers, leading to TV-rate inflation, even as streaming services have drained their viewers.
While a brand might garner a 20 percent discount for buying upfront, they are locked in, with no flexibility on the timing or nature of their campaign.
Here’s why marketing leaders like Pritchard think the savings are no longer worth the trade-off in flexibility: If marketers avoid advance purchase commitment on a spot, even at a higher price point, the brand has the opportunity to drive stronger results at a lower overall investment by pinpointing the optimal times and spots.
Lower investment. Higher impact. Greater agility to act opportunistically.
Technology Supports Transparency and Agility in Marketing Decisions
Martech’s emerging AI and machine-learning technologies are increasing transparency around TV and other marketing investments, enabling marketers to focus on driving better results, not just better pricing. Technology also supports shorter timeframes and creates greater transparency around when and where to invest in the future to drive growth. Why lock in to save 20 percent when you can continuously optimize and improve performance by 30 percent?