After many weeks of sometimes intense negotiations, the bulk of the 2024/25 season's primetime TV ad sales have been completed for linear TV and streaming venues. According to Media Dynamics, the good news is that ad spending for both sectors combined was up from $27.3 billion this season to $29.5 billion next season, an increase of 8%. However, all of this gain was attributed to streaming, which posted a 35% increase, while linear TV was down by 4%. Nevertheless, linear didn't do all that badly—compared to what some were predicting—due mainly to gains scored by its sports attractions.
The most interesting development concerned shifts in CPMs, as buyers were determined to wrest significant concessions from linear TV ad sellers for a second year in a row, something that has not happened in recent history. And they seem to have gotten what they wanted: linear adult TV CPMs declined to $43.35 for broadcast and $20.60 for cable, declines of 5.6% and 6.8%, respectively. But the big news regarding CPMs was evident in streaming, where buyers were firm in their resolve to pay CPMs that were more competitive with linear TV norms, something they hadn't focused on as much previously. This called for tougher negotiations with the high-priced sellers and a shifting of dollars to FASTS and Amazon or YouTube, all of which offered more favorable CPM pricing options. As a result, while streaming's ad revenue rose by 35%, its average CPM for a 30-second message declined by 16.7%, which partially offset its major ad revenue gains.
Net, net, the buyers wrangled an overall CPM reduction of about 10% in their combined linear TV and streaming buys, but spent 8% more to get it. A not so ugly trade-off in our opinion.
It should be noted that the upfront extends well beyond primetime and includes national syndication buys as well as ad spending for various dayparts: early AM, daytime, early news, late night, etc. on the broadcast TV networks and cable channels. Altogether, about $45-50 billion is spent in upfront buys for national TV advertisers of one kind or another, which leaves only about $10-12 billion remaining for scatter deals.
As the media landscape continues to evolve, these shifts in advertising dynamics reflect the growing influence of streaming platforms and the increasing pressure on traditional linear TV to adapt. Advertisers are clearly prioritizing flexibility and cost-effectiveness, driving a more competitive environment that benefits both buyers and viewers. The ongoing negotiations and outcomes from this year's upfront will likely set the tone for future interactions between advertisers and media outlets, underscoring the importance of innovation and adaptability in an ever-changing industry.
