Dive Brief:

• At the recent upfronts, P&G made it clear it plans to invest a lot of its ad dollars into linear TV. However, broadcast networks might not be happy about the news because of legacy deals in place that guarantee the CPG giant low price hikes on already low bases. per a report on Ad Age.
• The report stated P&G is planning to meaningfully increase its ad commitments.
• The news comes at a time when P&G has been critical of digital advertising, citing viewability issues and a non-transparent digital media supply chain.

Dive Insight:

The recent upfronts, an annual gathering of TV networks and advertisers to discuss plans for the coming season of programming, highlighted some of the issues marketers face in deciding where to invest their advertising budgets this year, with both digital and traditional TV presenting challenges. 

P&G’s Chief Brand Officer Marc Pritchard kicked off an ongoing industry-wide discussion about the issues facing digital advertising with his declaration in January at the Interactive Advertising Bureau Annual Leadership Meeting that ad platforms like Google, Facebook and others would have to get Media Rating Council accredited third-party validation for viewability by the end of this year or lose P&G’s substantial advertising business.

However, as the Ad Age report suggests, simply shifting budget from digital into TV may not be the answer. P&G has a vested interest in sticking with TV advertising given its grandfathered-in deals giving the CPG company a better bang for its TV bucks. According to Ad Age serious negotiations are just now beginning between advertisers and TV networks, and if the marketplace is strong, networks might follow last year’s model where they turned down money from advertisers paying lower rates. But as TV ratings continue to decline, networks could find that some marketers aren't will to pay higher TV rates.