Trump's trade war is giving renewed importance to advertising Upfronts

CNBC

11-05-2025

Media companies are staring down widespread economic uncertainty as their annual pitch to advertisers and marketers kicks off.
This week legacy entertainment giants including Comcast's NBCUniversal, Fox Corp. and Warner Bros. Discovery will stage presentations to ad buyers about why they should commit money to their upcoming slates of sports, entertainment and news programming. Netflix and Amazon's Prime Video are crowding the field holding their second annual Upfronts. Paramount Global held its presentations with advertisers and agencies last week.
This year the stakes are high as chief marketing officers across brands formulate contingency plans for a variety of outcomes regarding tariffs, inflation, consumer sentiment and other macroeconomic shifts that could affect their spending.
The evolving cost landscape adds to the existing headwinds facing the media industry: Pay-TV subscribers are fleeing for streaming options. And while streaming has begun to reach profitability for some companies, the services have yet to prove as lucrative as the traditional bundle. Meanwhile competition is stiff as digital and social media players capture the lion's share of ad dollars.
It'll prove another year of Upfronts clouded by concerns following the Covid pandemic and Hollywood strikes. Last year showed stabilization in an ad market, and executives had earlier told CNBC 2025 was expected to be another year of normalization.
Instead, the industry is bracing itself — and executives are fine-tuning their pitch for the moment.
"Media becomes more complicated in the landscape that's defined by inflation, regulatory uncertainty, shifting go-to-market timelines, and that serves as this backdrop for the season," said John Halley, ad sales chief at Paramount. "In moments of uncertainty like this there are very few places that offer the reach, the brand safety and the impact of the Paramount portfolio. That's an important point to make in a market like this."
In interviews with the top ad chiefs among the legacy media companies, executives touted sure-fire content and reliable viewership metrics in an effort to demonstrate the importance of advertising during uncertain times. Many executives said they have yet to see a "material" pullback on ad spending, as had been feared.
Chief among the top categories during Upfronts is live sports, they said. Live events, like awards shows, and so-called "must-see TV" will also be a big factor in conversations.
"Sports is having a halo on live [TV] in general," said Gina Reduto, executive vice president of ad strategy at NBCUniversal.
Although general entertainment has fallen behind sports in ratings, shows like Warner Bros. Discovery's "The White Lotus," which generated steady viewership and controlled the cultural conversation on a weekly basis, stand out.
"I think everyone knows that regardless of what happens, they still have to sell, they still have to move [product]," said Rita Ferro, Disney's president of global advertising. "They say, 'We still have to deliver products and services to our customers, and we have to do that in the best ways possible.' That's understanding the parameters we're dealing with and what those implications are in terms of pricing."
Concerns that President Donald Trump's trade war could jack up prices have yet to translate into a pullback in advertising spending, media executives told CNBC. Quarterly reports for media companies have yet to reflect any decrease in spend due to tariffs, although the decline of the linear TV bundle has weighed down financials.
WBD has yet to see "any material cuts" to its advertising volume, said Ryan Gould and Bobby Voltaggio, the company's presidents of U.S. advertising sales.
"The sentiment in the market isn't really indicative of what we're seeing currently. But you know, obviously, the future state of impact is yet to be known," said Voltaggio.
Jeff Collins, Fox's president of ad sales, echoed his peers: "Every client that we're talking with obviously has their scenario planning down for different things that could happen. But I think one of the important lessons that they learned during Covid was not to overreact to uncertainty.
"Obviously you need to have a plan, and they all have plans," Collins said. "But until there's some sort of tangible impact to their business, we haven't seen anyone really looking to pullback."
Disney's Ferro said her team has spent additional time with advertising partners in recent months, discussing various scenarios in which tariffs could affect different categories and products. She added chief marketing officers she's spoken with are operating in what she called "war rooms."
Ferro recounted specific conversations with a mobile phone company (which she declined to identify) that highlight the trade policy volatility: The phone company on a Friday in mid-April decided to pull an order for roughly $1.5 million in advertising for the month in light of tariff exposure. That weekend, the Trump administration exempted smartphones and other devices from the tariff scheme.
"So on Monday, that deal that went away on Friday went to order," said Ferro.
"It's literally in real time what's happening. I think there's a lot of scenarios they're going through and it's very in real time," Ferro said.
Data firm eMarketer estimated traditional TV advertising spending during Upfronts will decline by between $2.78 billion and $4.12 billion, depending on the severity of the tariff impact. Spending on streaming in these annual discussions will be more stable, however, with eMarketer expecting $1 billion in growth in that category. Media companies sell advertising for both platforms together.
This gives advertisers the upper hand when negotiating pricing, with the exception of sports content. It's likely the companies that are more affected by the loss of pay-TV subscribers will be willing to lower their pricing, said Jonathan Gudai, CEO of Adomni, a digital advertising platform.
Ad data firm EDO said there has already been a pullback on estimated ad spending in the automotive and various retail and consumer sectors since Trump's announcement on tariffs.
At the same time, concerns from consumers on soon-to-be higher prices has translated to higher ad effectiveness. For example, home appliances brands cut estimated spending by 30%, but consumers' responsiveness to ads rose 77%.
Media executives — who largely declined to discuss pricing — all said data from firms like EDO is key in discussions with advertisers, which are increasingly looked for tailored, targeted buys rather than sheer audience size.
"Advertisers are saying, 'I want to buy very specific audiences.' That's why outcomes are so important," said Kevin Krim, CEO of EDO. "You've got to have a very granular view of what you're willing to pay for."
All of these factors play into a recurring question for the advertising market: Do the annual Upfronts still matter?
"I've been in the business for about 30 years and the question of do we still need the Upfront [presentations] comes up every single year," said Fox's Collins.
The answer this year for the traditional media giants may be: more than ever.
"That's the last moment that you want to quit advertising because, you know, you got to try harder, not sort of capitulate," said EDO's Krim.
Krim added the need for flexibility makes real-time data more important: "You cannot be using last year's model."
He also said it may further shift ad dollars to programmatic buying, putting media companies on a more "level playing field" with digital companies like Meta, Amazon and Google. Despite being behemoths in the ad space, these tech companies have started to reveal the beginnings of cracks in their ad businesses.
The annual presentations could also lock in buying for some of the consistent favorite categories.
NBCUniversal's Reduto told CNBC that locking in ads during the Upfronts gives "an opportunity for advertisers to guarantee they have access to the things they know truly drives sales."
Earlier this year, Mark Marshall, NBCUniversal's chairman of global advertising and partnerships said in a letter that mapped out the company's upcoming slate of big sports events, including the Super Bowl, Olympics and World Cup, as proof of Upfronts' utility.
"I think from an advertiser perspective they still value the ability to lock in the franchise positions that they want to own, lock them in at desirable pricing, and be afforded flexibility," said Collins.