Fox Completes Its First Upfront Under New Ad Sales Chief With 6% to 8% CPM Increases

Volume was flat compared to last year

Upfront buyers were interested in Fox's first Marvel series, The Gifted. Ryan Green/Fox
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Fox Networks Group named Joe Marchese its president of advertising revenue just five days before its May 15 upfront presentation—but that didn’t keep the company from finishing its upfront negotiations in a timely matter.

The company—which includes Fox, Fox Sports, FX, FXX, National Geographic Channel, Nat Geo Wild and Nat Geo Mundo (but not Fox News Channel)—has secured CPM (cost per thousand viewers reached) increases of 6 percent to 8 percent across its portfolio, according to a source familiar with negotiations. Volume was flat compared to last year.

This was the third upfront in which Fox Networks Group sold inventory across its entire portfolio. Fox’s prime-time lineup and its cable networks each recorded CPM increases of 6 percent to 8 percent.

Fox’s upfront gains are the latest indication that the upfront market was stronger than anticipated, which Marchese himself predicted while speaking with Adweek during negotiations. “You’ll see a market that’s slightly healthier than you might think,” he said. “Taking back this word ‘efficiency,’ the cost per what you get in what we’ll call a TV-on-any-platform impression, is actually the most efficient one you can buy. And as consumers start to restrict that supply—that’s not on FNG’s side, that’s the consumer saying, here’s how much we can take—I think that it’s still going to be in demand.”

On the broadcast side, buyers had strong interest in Fox’s first Marvel drama, The Gifted, which is set in the X-Men universe and debuts on Monday, Oct. 2. “Any show that involves Marvel is pretty exciting, and I, as a comic book nerd, can’t wait to see that come out,” Marchese told Adweek recently. Other in-demand shows include last season’s freshman comedy The Mick and its music dramas Empire and Star, which will air together on Wednesdays.

The network is giving its strongest launching pad to Seth MacFarlane’s new sci-fi series The Orville, which Fox is premiering after NFL doubleheaders on consecutive Sundays in September, before the show moves its regular Thursday time slot. Aside from The Orville, Fox will roll out its entire fall schedule during a seven-day window, beginning Tuesday, Sept. 26.

Upfront talks also focused on FX’s upcoming American Crime Story installment on the murder of Gianni Versace, and Fox Sports, which got a big spotlight at last month’s presentation. FX had the strongest demand among its cable networks.

On the Fox Sports side, sales for the 2018 World Cup have been driving demand across the portfolio, with Nielsen’s out of home metric being included in all World Cup estimates and deliveries. Fox Sports’ new Big Ten package led to upfront gains, while more than 30 percent of the NFL market has agreed to use Nielsen’s out of home metric as part of its upfront deals.

“The reality of where the advertising world is going to be is you have this balance between great storytelling—which is going to be [Fox Broadcasting Company]/FX/Nat Geo—and this scale of live sports,” Marchese told Adweek earlier this month. “You take what Fox Sports did last year and add the Big 10 to it [this fall]—there’s a lot of people who know what the Ohio State-Michigan [football] game means—and say, great: you have this unparalleled scale, especially of live and concurrent viewers. That, blended with great storytelling, is a story that any brand should get excited about.”

Another key part of upfront talks was OpenAP, the audience targeting platform standard for networks and agencies that Marchese created alongside his fellow ad sales chiefs at Viacom and Turner.

Strongest advertising categories included packaged goods, pharmaceutical and quick service restaurants.

This was the first upfront led by Marchese, who got the job just five days before last month’s upfront event, but still took center stage at the presentation to announce several new ad initiatives. Among them: Fox is teaming with NBC to use analytics data from Moat and will incorporate Moat’s video quality score across all linear and digital platforms. Marchese said Fox will guarantee against Moat’s video quality score for the Fox portions of any campaign that implements Moat campaign-wide.

Fox is rolling out Up//Lift from True[X], a brand lift optimization system that involves sentiment data and machine learning algorithms. As part of the company’s efforts to reduce ad load, FX will no longer be selling standard commercials across digital and on-demand viewing, relying instead on brand partner messaging.

The FX shift was the initiative Marchese was most excited about for this upfront, he told Adweek recently: “Anything that hits the theme of, it’s better for the viewer and it’s better for the advertiser, we will commit resources to. If I’m a betting man—and I am—12 months from now, the brands you’re going to remember, I think we’ll show that viewers are more appreciative and view through more in that setting, which will actually lead to more inventory.”

Fox’s digital products saw growth of more than 40 percent this year, with FX’s upfront digital commitments more than doubling last year’s tally.

Marchese replaced Toby Byrne, who left the company last September, just ahead of the 2016-17 season. In the eight months that it took Fox to fill the position, Marchese ran the ad sales division alongside evp of ad sales Bruce Lefkowitz and evp of global solutions Danielle Maged.

Under Byrne, Fox Networks Group finished last year’s upfront negotiations in mid-July, notching volume increases of around 5 percent in CPM and gains in the high single digits to low double digits.

Fox completed its negotiations two weeks after broadcast competitors CBS and sister network The CW both wrapped their upfront sales with high-single to double-digit CPM increases. Disney-ABC and Viacom each finished their respective upfront sales late last week, just before the July 4 holiday.

@jasonlynch Jason Lynch is TV Editor at Adweek, overseeing trends, technology, personalities and programming across broadcast, cable and streaming video.