Where do TV ads come from? Contrary to popular belief, media buying isn’t something that ad execs do over martini lunches on Madison Ave. Let’s bust that Mad Men myth and take a closer look at the modern world of media buying.
The media buying playing field
It’s simple enough on paper: a network, TV station, streaming platform or other TV distributor has advertising inventory for sale alongside its programming; a brand (or an agency on its behalf) wants to use some of that inventory to reach customers and prospects; if the seller’s audience is a good fit for the buyer’s intended target—and the price is right—then the deal goes through and everyone’s happy.
But in practice, media buying can get very complicated very quickly. What exactly are media buyers buying? How much inventory is there? What’s a good rate? Do all ad types perform the same? Who defines target audiences? Are there any guarantees?
Before any of those questions can be answered, the first step in the media buying journey is to understand what TV is. It’s not a disingenuous question. The TV landscape has changed a lot in recent years. From broadcast to cable, satellite, FAST TV and AVOD, viewers today have dozens of options to watch TV on their own terms. That’s great for viewers, and it gives media buyers more options, too. But every new platform comes with its own idiosyncrasies and adds another layer of complexity to the media buying equation.
Upfront and scatter
The first TV programs were sponsored by single advertisers. Campbell’s Soup sponsored Lassie; Johnson & Johnson: The Adventures of Robin Hood; Beech-Nut Gum: The Dick Clark Show; Philip Morris: I Love Lucy. It wasn’t long before the commercial pod emerged, greatly expanding the ad inventory on TV and setting the stage for media buying as we know it today.
In the U.S., TV media buyers buy advertising at the Upfronts—a weeklong event in the spring each year where networks and other distributors introduce upcoming shows—and in the scatter (or remnant) market. Doing business at the Upfronts 6 to 12 months before new shows are aired allows sellers to secure funding well ahead of a new TV season, and buyers to lock-in guaranteed placements on coveted time slots and at a fair price.
These days, around USD$20 billion worth of advertising money changes hands at the Upfronts for primetime broadcast and cable, and about the same amount for other dayparts and CTV. Another USD$20-30 billion goes to the scatter market throughout the year, giving buyers the flexibility to bid for ad placements much closer to air time.
But what does ‘air time’ mean in a world where broadcast and cable represent just half of total TV viewing, as we noted in our recent report The Next Frontier: Your guide to the 2024-25 upfronts/newfronts planning season? The convergence of linear and streaming is quickly redefining media buying.
Where is the audience?
Nielsen’s Head of Global Marketing Alison Gensheimer pointed out that “TV isn’t going anywhere, it’s going everywhere. Definitions change depending on who you talk to, and I’m starting to wonder if it even matters. For advertisers, the important question—now and forever—is where the audience is.”
Media buying negotiations have long been tied to specific network, daypart, day-of-the-week combinations because that was the only way to reach audiences loyal to specific programs. Everyone in the mid-90s wanted to buy primetime on Thursdays nights on NBC because that was when Friends and Seinfeld would air, and those shows attracted the most young adults.
But if the ultimate objective is to reach a particular audience—whether it’s young adults, foodies, outdoor enthusiasts or new parents—a TV lineup isn’t a requirement anymore. Thanks to CTV and other data and infrastructure breakthroughs like measurement-grade identity graphs, there are ways today to reach advanced audiences on TV that don’t involve using a niche program as a surrogate.
Media buying on TV is starting to look a lot like media buying on digital platforms, doesn’t it?
How is measurement evolving at Nielsen?
At Nielsen, we’ve been reporting C3 (live + 3 days) and C7 (live + 7 days) average commercial minutes for over 15 years, and those panel-based metrics have provided and continue to provide a very robust currency for media buyers and sellers. There’s tremendous value in having a consistent metric year after year, but the level of fragmentation in the industry has reached a tipping point.
We’re now transitioning to a big data + panel measurement methodology where the scale of big data is brought to bear to measure a wider variety of programs and get a more comprehensive view of audience behavior, and where panel data is used for validation and calibration. We’re also deploying technology capable of reporting commercials at the subminute level, making it possible for advertisers to understand the performance of a much wider selection of ad formats.
What does it mean for media buying on television?
At the moment, TV media buying is a complicated mix of tradition and modernity. Media buyers are being asked to combine the scale of linear TV with the addressability of CTV to meet brand and performance objectives. It’s no small ask, especially when media budgets are under pressure. But new measurement solutions on the horizon will bring more structure, consistency and granular insights to the negotiating table—and unlock more opportunities for both buyers and sellers.
