Media Buyers Spending TV Dollars at NewFronts

Slow shift is seen as more viewers move online
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With advertisers clamoring for online video, a lot of activity is expected to surround the third annual Digital Content NewFronts in New York this week.

The NewFronts were conceived as a way to give Web-based media a forum to show off their wares and catch the eye of media buyers more familiar with traditional television.

At this point, digital video has become an acceptable alternative to TV for some media buyers and their clients.

“We see strong engagement lifts, brand metric lifts, purchase intent lifts, when online video is run in conjunction with television, and I’d say that certainly extends into the mobile video space too,” says Amanda Richman, president of Starcom U.S.

That means some of the billions once earmarked for TV are becoming online video dollars. “TV money has been migrating to online video for the last four or five years, in small steps,” Richman says. “New- Fronts has definitely helped spark some of that, but I think more and more the data simply is in sync with consumer behavior.”

Peter Naylor, the new executive VP for sales at Hulu, says he’s had discussions with agency execs who say their research teams are telling them to put 10% to 20% of their video budget online, especially if the target viewer is young.

“It’s going to be interesting to watch online video’s share continue to creep upward. I don’t know that we’ll ever have some seismic cannonball into the pool, but everyone’s swimming,” Naylor says.

Unlike past years, the big TV network companies are mainly staying away from the NewFronts. CBS and Comcast’s NBCU have decided to incorporate digital sales within their broadcast and cable upfront presentations. “When it comes to premium video, demand still substantially outweighs supply,” says Jim Lanzone, CEO of CBS Interactive.

Lanzone adds that some people are trying to stretch the definition of premium video, rather than be in the quantity game, where pricing is much lower.

“I really think there’s room for both. It’s just a different kind of buy and a different price point,” Lanzone says.

Yahoo in particular has been in the news with reports that it is planning to spend big on the kind of content familiar to premium TV viewers, whether on Netflix or HBO.

“At our NewFronts this year, the focus will be on superior content and advertising. Yahoo is committed to creating programming and advertising that entertains our users, and we’ll showcase our latest efforts at an event at Lincoln Center,” the company says in a statement. “We will share new content, new products and new insights for brand advertisers who are looking to engage a large, targeted audience.”

But content doesn’t have to be long-form to entice advertisers. “Our clients are looking to engage with audiences regardless of the length of format,” Richman says. “Everything is competing for marketers’ attention and for the audience’s attention, so we’re trying to find that right mix of content.”

Richman says that while the NewFronts still have a function three years after they started, she wonders if they will still be useful in another three years. “There may be a three-year window before we eventually just merge to a total upfront landscape,” she says.

Here’s a look at some of the other companies presenting at the NewFronts.

SONY/CRACKLE

This year’s NewFronts will be different for Sony’s Crackle network. “This time we can really point to all of the things we promised that we delivered against,” says Eric Berger, executive VP digital networks at Sony Pictures Television and GM of Crackle. “We talked about a very different model for integrating partners, and we talked about some interesting new ad products and we’ve delivered against all of those.”

With its content having movie studio DNA, Berger doesn’t see the Internet companies as being in the same ball game. “So the competitor is more the TV networks, and we think of Crackle that way, as more of a programmed network that just lives overthe- top,” he says.

Berger says the connected TV space is blowing up. “Some agencies were asking us to actually pitch as TV: ‘Yeah, you’ve got online and you’ve got mobile. That’s fine. But give me a solid pitch that frames this as TV so I can put it up accordingly against other TV opportunities and TV money,’” he says. “That’s a differentiator for us in the NewFronts.”

Google /Youtube

Google/YouTube will be looking to create a little scarcity in the market by focusing on what it calls its Google Preferred package which focuses only on its top 5% of video creators, as opposed to all the other content that appears on the site, says Suzie Reider, managing director, brand solutions at YouTube.

That 5% is selected based on a set of engagement metrics across the channels, and YouTube has begun promoting those creators—including Michelle Phan, Bethany Mota and Rosanna Pansino—through a TV ad campaign, Reider says.

YouTube will also be offering guarantees to advertisers based on third-party numbers from Nielsen and comScore.

“Those are two things that are different innovatively and should be very appealing to marketers and the buying community this year,” Reider says.

HULU

Hulu has a new management lineup, headed by CEO Mike Hopkins, along with Naylor in his new post as executive VP for ad sales.

“When we go to market, we’re transacting with a lot of television folks. So if anything, I think we’re more of an upfront than a NewFront,” says Naylor. Interestingly, less than half of Hulu’s ad inventory comes from offnet shows from its parent companies Comcast, Walt Disney Co. and 21st Century Fox.

That includes originals. “We know we’ve got to keep taking big swings, because an original helps define a network or a brand like Hulu,” Naylor adds. “They’re valuable to viewers. And if they’re valuable to viewers, they’re valuable to the advertisers.”

With advertisers clamoring for online video, a lot of activity is expected to surround the third annual Digital Content NewFronts in New York this week.

The NewFronts were conceived as a way to give Web-based media a forum to show off their wares and catch the eye of media buyers more familiar with traditional television.

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