Amazon has been trying to shake up the TV industry’s annual “upfront” advertising sales tradition, and Madison Avenue is working to navigate the aftershocks.
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TV networks were signaled earlier this summer by top media buyers that a timely opportunity to deepen business relationships with Amazon might slow down the industry’s annual ad sales negotiations process, according to eight people familiar with this year’s upfront talks. Those discussions for decades have been held during the late spring and summer weeks in between the traditional September to May TV season. That timetable for displaying TV series has been greatly disrupted by the advent of streaming. But the business of buying and selling TV advertising is still — for now — ruled by upfront negotiations. This year, Amazon has not been shy about throwing its weight around as the longtime pillar of the Big Tech sector is now also in the business of selling significant TV time.
Simply put, Amazon is in the midst of a massive review of its media buying accounts, and Interpublic Group’s Mediabrands, Omnicom Group’s OMG and WPP’s GroupM are competing for its business. One or more of the media agencies were expected to consider holding back dollars to invest in Amazon’s ad-supported streaming tier, these people say. The review of Amazon’s media-buying business, currently served by Interpublic, is at present expected to be completed sometime in the fall.
The eyebrow-raising acknowledgement spotlights Amazon’s growing influence in the ad industry, where it has increasing goods to sell, ranging from spots in “Thursday Night Football” and a new cycle of its “Lord of the Rings: The Rings of Power” TV franchise,” to a host of ad-tech products that are part of its large Amazon Web Services.
The timing of Amazon’s account review likely affected the pace of the upfront market, these people say, when U.S. TV companies try to sell the bulk of their advertising inventory ahead of their next programming cycle. WPP, Interpublic and Omnicom may also have been hamstrung in their negotiations with Amazon, one buying executive suggests. “WPP, Interpublic and Omnicom, they cannot just go in and say, ‘We are going to sting you,’” if Amazon’s pricing or sales effort was seen as undesirable, says this executive. “They’ve got to bring extra money to the marketplace for Amazon.”
Amazon declined to comment on the review or its activity in the upfront. GroupM, Omnicom Media Group and Mediabrands all declined to make executives available for comment.
The situation has led to an expectation that millions of ad dollars may come back into the market in the fall, with losers in the review dispatching money previously reserved for Amazon. Whether or not they might be able to get the advertising inventory they may have desired from Amazon’s video rivals remains to be seen.
Using an account review to press for more favorable terms in the marketplace may not be the most common tactic, but it has been used before, according to executives. Media companies are also big advertisers. Their movie studios spend millions on ads and trailers that push consumers to opening weekends and their TV networks often mine new territory with clever “tune in” campaigns that place commercial messages about new series on supermarket freezer doors or even on deli-counter wrapping paper. There have been occasions in past upfronts where a media company might press one of the buying agencies with which it deals to bring more dollars to negotiations if it wants to keep a lucrative or prestigious movie or TV network account, according to people familiar with the business.
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Still, using an account review to spur such guarantees “would be extraordinary,” says Melissa Lea, an advertising-industry veteran who is founder of Muster Consulting, which helps advertisers conduct reviews and audits of agency work. Typical media-agency account reviews would likely focus on an agency’s plan to place commercials and the rates it might be able to deliver, Lea says, as well as some sort of understanding of how many full-time employees would be required to maintain the work.
Big advertisers have gummed the upfront works in the past. In 2012, for instance, General Motors and its buying agency at the time, Carat — now part of the ad conglomerate Dentsu – insisted on getting pricing rollbacks from TV networks . At that time, when the U.S. economy was in better shape and streaming had yet to take root, big broadcast and cable TV operators pushed back, refusing to grant the automaking giant access to top programming and sports.
The issue with Amazon surfaces amid a much more complex market. The launch of new ad-supported tiers from Amazon and Netflix have resulted in a glut of streaming ad inventory in the marketplace. Amid a growing supply of such commercial slots, advertisers have called for “rollbacks” in the rates they pay for premium sites including Disney+. Amazon’s review could help the company offset some of the decline it might have been forced to offer in overall rates.
Amazon has also become a Madison Avenue giant. The company spent nearly $3.5 billion advertising across digital, out of home, print, radio, and TV outlets during 2023, according to data from MediaRadar, a tracker of ad spending. Its ad outlays appear to be on the rise. MediaRadar found Amazon spent $3.4 billion on similar advertising during the first six months of 2024.
Such sums made Amazon one of the nation’s top ad spenders last year, according to MediaRadar, along with Procter & Gamble, AbbVie, the Walt Disney Co., and Verizon Communications. Interpublic, Omnicom and WPP would be sure to garner important heft among media outlets and prestige from being able to drive Amazon’s operations – ensuring that no advertising company involved in a review could ignore what it might do for business.
At the same time, the media agencies need to step into such a process carefully. After all, the dollars they might hold in reserve typically belong to their clients. The agencies have a fiduciary duty to manage those funds carefully and in the best interest of their advertisers’ business plans. Whether keeping those dollars out of the market in a bid to curry favor with Amazon would count as part of such a strategy remains to be seen. “It is an agency’s job to get the best deal for their clients, but to do it in a transparent and ethical way,” says Lea.
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