Will the Upfronts/Newfronts Sales Model Go Away?

This is the second in a series of articles based on the findings from our recent media marketplace survey looking into how media companies are addressing the rise of DMS and other changes in the marketplace The first post discussed media executivesamp8217 top concerns and priorities for the rest of the year In this article we will examine media executivesamp8217 predictions around industry MampampA activity the UpfrontsNewfronts sales model and increased pressure on profit marginsThe first half of 2015 saw some significant media mergers and acquisitions including Verizonamp8217s acquisition of AOL and more big deals seem to be on the horizon with TMobile discussing a potential merger with Dish Network The vast majority of media executives who participated in our survey 79 told us they expect MampampA activity to increase throughout 2015 amp160They also predict that acquisition targets will most likely be digital companies This is due to the expected heightened effort of media companies to improve their DMS pricing models and advertising measurement capabilitiesHalf of respondents believe acquisitions will be made to protect existing market share while the other half of respondents think they will be made in order to expand product or service offerings Across the board improving an integrated multichannel inventory offering is the most commonly cited driver of MampampA activity by all survey demographics Clevel 32 senior management 39 finance 31 and marketing 41 This proves that the rise of DMS channels has raised the bar for many media companies and they are now looking to expand their capabilities and protect their footprint through strategic acquisitionsSurvey findings also indicate that about twothirds 63 of respondents anticipate that the current UpfrontsNewfronts sales model will change during the next three years Among the survey demographic groups senior managers and financial officers most frequently say the sales model will change by 2018 68 and 64 respectively and the majority of Clevel and marketing executives agree 58 and 62 respectively A potential change to the sales model could shift market emphasis on premium data and analytics over premium content impacting both media companies and advertisersAs media companies build their DMS inventory and pricing models media executives note that they are facing increased pressure of profit margins and 71 of respondents predict pressure on profits will increase over the next 12 months This widespread concern around pressure on profit margins moving forward may help explain why so many media executives expect that the UpfrontsNewfronts sales model will changeThe recent rise of DMS channels is dramatically changing the media industry While promoting consumer engagement and leveraging content will likely remain crucial components of media companiesamp8217 strategies the way the industry executes these tactics is quickly evolving While a new normal has yet to be established in the meantime media companies can better position themselves for success by carefully considering the priorities and predictions of key industry players as they relate to their businessIf youamp8217re interested in reading the full report Operating in Todayamp8217s Media Marketplace you can find it available for download hereThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillageMyersBizNet management or associated bloggers

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Will the Upfronts/Newfronts Sales Model Go Away?

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Jim Porçarelli

"About That with Carl Mayer:" Alaina Donnellon (Episode 10: Political Spending) - By Carl Mayer

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Will the Upfronts/Newfronts Sales Model Go Away?

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