The Digiday Podcast - Episode Summary

Title: Upfront Week Recap, Charter-Cox Merger, Microsoft’s DSP Shutdown + Horizon Media’s David Campanelli on the Upfront Market Ahead
Host: Tim Peterson
Guest: David Campanelli, President of Global Investment at Horizon Media
Release Date: May 20, 2025

Introduction

In this episode of The Digiday Podcast, host Tim Peterson, alongside guest Sam Bradley, delves into the latest happenings in the media and marketing landscape. The discussion focuses on the recent Upfront Week, the significant Charter-Cox merger, Microsoft's decision to shut down its Demand Side Platform (DSP), and insights from David Campanelli of Horizon Media on the future of the upfront market.

Upfront Week Recap

Highlights and Lowlights

The episode kicks off with reflections on Upfront Week, a pivotal event where media companies present their offerings to advertisers. Tim Peterson shares his first-hand experience attending the event in New York, emphasizing the shift from traditional, high-energy presentations to more nuanced and prolonged negotiations.

Notable Highlights:

• Netflix's Presentation: David Campanelli highlights Netflix's strategic entrance into Upfront Week with notable personalities like Jude Law and Jason Bateman, signaling their robust commitment to the advertising space. “I thought that was kind of cool. I'm a massive fan of FX Hulu’s The Bear, so the three actors coming out was a nice one.” [53:27]

• Musical Performances: While some performances, such as Snoop Dogg and Steve Aoki, were deemed unnecessary by Campanelli, Tim appreciated Lady Gaga's closing act as one of the best live performances he's ever witnessed. “Lady Gaga closes out Upfront Week with one of the best live performances I've ever seen.” [55:46]

Lowlights:

• Aggressive Musical Acts: Campanelli expressed his discomfort with high-energy performances like Steve Aoki's during lengthy presentations. “Musical performances at 11 am in the morning are not overly necessary...” [55:20]

• Logistical Issues: The tight scheduling of presentations, especially with events like Amazon's Monday night session, left little time for attendees to grab refreshments. “The cookies and gummy bears at Amazon didn't quite cut it for dinner that night.” [55:51]

Charter-Cox Merger

Overview and Implications

The merger between Charter and Cox, valued at approximately $22 billion, is a significant move in the U.S. pay TV landscape. Tim Peterson explains that combining Charter’s 31.4 million customers with Cox’s 6.3 million enhances their market footprint, providing greater leverage with major networks like Disney and NBC.

Key Points:

• Market Consolidation: The merger aims to stabilize declining pay TV subscriptions by bolstering combined internet and wireless services. “This brings them together to give a bit more leverage when it comes to Disney, NBC, Warner...” [09:38]

• Impact on Pricing: With enhanced leverage, networks like ESPN may demand higher fees per subscriber, potentially leading to increased costs for pay TV providers and consumers alike. “Advertisers would like to keep them bonus impressions because their idea is... why should we have to pay for them now?” [07:49]

• Competitive Dynamics: The merger raises questions about possible reactions from major players like Comcast, Verizon, T-Mobile, and AT&T, potentially spurring further consolidation in the industry. “Does Comcast feel a need to react to this? Do Verizon or T Mobile or AT&T feel any sort of need to react to this?” [14:16]

Challenges:

• Subscriber Decline: Charter has been losing internet subscribers, with a reported loss of 60,000 in Q1 2025, highlighting the competitive pressure from wireless services. “Charter lost 60,000 Internet subscribers in the first quarter of 2025.” [12:19]

• Regulatory Hurdles: The merger faces a stringent approval process amid a politically aggressive stance on mergers and acquisitions, potentially delaying the deal until next year. “There's still a lot that is going to need to happen before it actually gets approval and closes.” [14:20]

Microsoft’s DSP Shutdown

Background and Consequences

Microsoft’s decision to discontinue its DSP, formerly known as Xander, marks a significant shift in the ad tech landscape. This move is expected to result in substantial layoffs and signifies Microsoft's retreat from being a major player in the ad business.

Insights:

• DSPs Market Consolidation: With Microsoft's exit, the dominant DSPs are now Trade Desk, Google’s DV360, Amazon’s DSP, and Yahoo, effectively creating a duopoly that could reduce competition and increase pricing power. “It's really Trade Desk and DV360 as the kind of the DSP duopoly.” [17:26]

• Impact on CTV Advertising: The shutdown affects Connected TV (CTV) advertising, where Microsoft's DSP was poised to make significant inroads, especially in securing deals like Netflix’s ad inventory. “Trade Desk, Google’s DV360, Amazon’s DSP and Yahoo as well have been making a lot of inroads when it comes to CTV.” [18:25]

• Negotiation Dynamics: The reduction in DSP choices gives buyers more leverage, potentially leading to better terms and lower costs in the marketplace. “The more choice they have, the more agency they have in the market, better suppose their voice comes through in any negotiations.” [19:42]

Market Reaction:

• Antitrust Concerns: The episode touches on the ongoing antitrust pressures facing major DSPs like Google’s DV360, which could influence future market dynamics and regulatory actions. “There's been a lot of pressure on DV360 with Google with the antitrust lawsuit...” [18:25]

Upfront Market Insights with David Campanelli

Evolving Upfront Practices

David Campanelli discusses how the upfront market has transformed from a concentrated event to a year-round negotiation process. The traditional end-of-May rush has evolved into continuous dialogues starting as early as CES in January.

Key Takeaways:

• Continuous Negotiations: “Upfront is not a limited conversation in the end of May or early June, it really is just about 52 weeks a year.” [22:22]

• Increased Complexity: The modern upfront market involves intricate deals across multiple platforms, including linear TV, streaming, and programmatic advertising. “It's just much more complicated than it used to be.” [23:39]

• Flexibility in Deals: There's a growing emphasis on flexibility in contractual terms, particularly in cancellation policies. This shift aims to accommodate advertisers' needs in a volatile economic environment. “We're pushing some of that flexibility second and third or more firm in the earlier quarters.” [29:27]

Measurement and Currency Shifts:

• Nielsen+ Big Data: The industry is transitioning from traditional panel-based measurements to Nielsen’s Big Data as the primary metric for transactions. This change introduces discrepancies in historical data comparisons. “It's expected to be the primary currency in this upfront and the first truly new currency to become the primary currency in the upfront since Nielsen's original legacy panel based measurement system.” [05:27]

• Impact on CPMs: Campanelli explains how changes in measurement affect Cost Per Mille (CPM) rates, with some networks experiencing increased costs due to newly counted out-of-home audiences. “Advertisers would like to keep them bonus impressions... whereas from the network side... we would like to get paid for the impressions we're giving you.” [07:49]

• Alternative Measurement Tools: While Nielsen remains dominant, alternatives like Videoamp, comScore, and iSpot are gaining traction, particularly for advanced audience metrics and out-of-home measurements. “Nielsen will still be the primary. Videoamp has made inroads, particularly around advanced audiences.” [41:10]

Sports Advertising:

• Unified Marketplace: Sports advertising is no longer siloed but integrated into the broader upfront discussions, enhancing its strategic importance. “It's part of the overall discussion... we know that this sports isn't moving and we're not canceling it or not canceling much of it.” [53:08]

• Pricing Trends: Sports remains a high-demand area with strong CPM rates due to its unparalleled reach. However, streaming sports may see normalized CPMs as platforms scale. “Streaming should pass this year, I would think.” [51:25]

Future Outlook:

• Streaming Dominance: David anticipates streaming advertising to surpass linear TV in upfront commitments, driven by the increasing consumption and advertiser shift towards digital platforms. “Streaming should pass this year, I would think.” [50:58]

• Measurement Challenges: The integration of dynamic ad insertion (DAI) poses challenges for consistent measurement, particularly in live sports events where Nielsen ratings are harder to apply. “Nielsen doesn't count that towards the gross rating point.” [37:00]

Conclusion

The episode provides a comprehensive overview of the current media and advertising landscape, highlighting significant industry shifts such as the Charter-Cox merger and Microsoft's exit from the DSP market. Insights from David Campanelli shed light on the evolving nature of upfront negotiations, the critical role of measurement metrics, and the rising dominance of streaming in advertising budgets. As the industry navigates these changes, flexibility and adaptability emerge as key themes for both media providers and advertisers.

Notable Quotes:

• “We're talking 52 weeks a year. Have we been negotiating rates? No, not necessarily, but we've certainly been talking all year.” – David Campanelli [22:22]
• “If my unit cost was $100,000 and you measured it one way yesterday and a different way today, my unit cost is still $100,000 and my CPM changes.” – David Campanelli [45:57]
• “Nielsen will still be the primary. Videoamp has made inroads, particularly around advanced audiences.” – David Campanelli [41:10]

This summary encapsulates the key discussions and insights from the podcast episode, providing a comprehensive overview for those who haven't listened. The integration of direct quotes with timestamps offers additional depth and context to the topics covered.