Prior to this season’s upfronts, Erin Firneno, vice president of business intelligence operations at Advertiser Perceptions, said she didn’t envision a big change in the percentage of budgets that advertisers allocate to upfronts compared with scatter. However, she added, “We will most likely be seeing moderately higher prices in the scatter market this year.”
In December 2021, Zenith forecast that globally, the cost of advertising would rise by 11% for TV in 2022, compared with 4% for out-of-home, 3% for digital display, 2% for radio, and not at all for print.
A relative scarcity of CTV inventory, along with the richness of audience insights from the format, has resulted in higher CPMs than for linear. Standard Media Index (SMI) estimated that in Q3 2021, OTT CPMs were 28% above those of linear TV in the US.
These price increases in TV and CTV advertising are compounded by two key factors:
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Inflation. In the US, it’s running at the fastest pace in four decades.
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The erosion of legacy identifiers. Advertisers have to funnel more money toward premium environments that don’t rely on third-party cookies or mobile IDs, such as linear and CTV.