- TV networks are hoping for a return to normalcy after a turbulent 2020.
- Advertising will spend $19.90 Billion upfront for the 2021-2022 TV Season, an increase of 7.6% compared to the previous cycle.
For the 2021–2022 TV season, US upfront ad spending will bounce back to nearly pre-pandemic levels, if not to its 2018–2019 peak, according to our latest estimates.
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Advertisers will increase their upfront TV spending by 7.6% this year to $19.90 billion—this assumes a continuing recovery from the pandemic and economic crisis in the US.
The upfront TV advertising spending forecast includes TV ads spending that result from national primetime TV upfronts. This includes both linear and digital inventory sold by broadcast networks and cable channels during upfronts. However, upfront commitments that don’t result in a transaction are not included. Due to the fact that some upfront commitments are cancelled, commitment estimates can differ from what advertisers actually spend.
We last forecast upfront TV ad spending in June 2020, when we expected big decreases as a result of the pandemic—but those decreases took a different shape than we had predicted at the time.
In June 2020, we estimated only a 1.4% drop in upfront TV ad spending for the 2019–2020 season, but the pandemic led TV advertisers to ultimately cancel $3 billion of their upfront commitments for that season, according to Media Dynamics. This development led us to lower our estimate for the 2019–2020 upfronts, and we now believe upfront TV ad spending dipped by 6.8% in that cycle.
During the 2020–2021 season, not as many advertisers exited the TV market as predicted. We had predicted a 27.1% drop in upfront TV advertising spending for June 2020. However, we now expect a 3.5% drop in upfront TV ad spending as advertisers spend $18.50 million on commitments to networks.
Another reason the percentage drop isn’t steeper for 2020–2021 is the pullouts that happened at the end of the previous cycle. When we compare the 2020–2021 season with the cycle two years prior, we see about a $2 billion drop in upfront TV ad spending.
Advertisers can’t always spend the money they make upfront. Advertisers cancel approximately 4% of their upfront commitments in a typical year. In the unusual H2 2020, cancellations increased. We expect that cancellation rates will return to normal levels during the 2021–2022 upfronts as the economy recovers and brands gain more certainty over their long-term media plans.
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This article was first published on eMarketer.
