Viewer Shift to Streaming Powers Bullish NewFronts

Brand safety, crossplatform measurement remain concerns
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The continuing shift of viewers from traditional television to digital video will fuel this week’s Interactive Advertising Bureau NewFront presentations, where new and old media companies gather in New York to try to convince advertisers they’ve got what people want to watch how they want to watch it.

“The thing that the industry hasn’t really fully grasped is just how quickly the migration is happening away from traditional TV,” Hulu head of research Julie DeTraglia said. “The cord-cutting has accelerated really, really quickly.”

YouTube will take originals like 'Cobra Kai' out from behind its paywall. 

YouTube will take originals like 'Cobra Kai' out from behind its paywall. 

This year’s NewFronts pack in a range of media companies, from Hulu, one of the earliest TV streamers, to online video powerhouse YouTube; social-media giant Twitter; publishers Condé Nast and The New York Times; and even retailers such as Walmart and Target, which have valuable data about shoppers. “Consumption patterns have shifted faster than many predicted,” Brian Albert, managing director, Google/YouTube Media Partnerships & Brandunit, said. “People today rely less on traditional TV and more on content they’re most passionate about.”

YouTube conducted research with Omnicom Media Group which found that for viewers, it was three times more important to find content they were passionate about than whether or not the content featured celebrities, almost twice as important as it having high production values and more than twice as important than whether the programming was on a preferred network or channel, Albert said.

Digital video is maturing but can still use a showcase like the NewFronts, Publicis Media executive vice president for U.S. digital investment and partnerships Hayley Diamond said.

Video consumption is up even though live linear TV is down, Diamond noted. The growth is being driven by digital video, particularly on mobile devices and connected TV platforms.

Advertisers recognize the power of video, even when it’s not on traditional platforms. “Marketers absolutely understand the value of sight, sound and motion,” Diamond said. “So as consumption trends really shift toward digital video, it’s important for all of us as marketers to pay attention to the opportunities out there.”

The major media companies, including AT&T’s WarnerMedia and Comcast’s NBCUniversal, are planning new streaming services that will be ad-supported. And Pluto TV, the streaming TV service acquired last year by Viacom, will be a big part of that company’s NewFront presentation.

The quality of digital video is also improving. Condé Nast, which is presenting video content at the NewFronts, is focused not only on views but on engagement. It has found that as it makes longer and longer videos, engagement has grown.

“Brands want to align themselves with audiences that are engaged in the content that they’re viewing, and that points to success we’ve had in the growth in watch time across all our content, and in particular where we’ve made content longer,” Condé Nast Entertainment president Oren Katzeff said.

Content that is more like TV.

Here is what some of the NewFront presenters will be telling media buyers and advertisers this week.

YouTube

YouTube will be focusing much of its presentation on Google Preferred, the ad package that bundles video from the top five YouTube channels. The ranking is based on an algorithm that was initially based on passion and popularity, Albert said. A third “P” was added last year to provide protection from content that was not brand-friendly.

All videos are reviewed by human screeners before inclusion in Google Preferred, but brand safety remained an issue for YouTube because of material in its comment sections. YouTube responded by disabling comments on tens of millions of videos.

“We know there’s still work to do in this area, but overall we’re pretty pleased with the feedback we continue to get from both customers and agency partners,” Albert said.

YouTube is also working with third-parties such as IAS and DoubleVerify to confirm that ads are running in brand-safe environments.

This year, two more Ps are being added to the Google Preferred algorithm: platform, because TV screens are YouTube’s fastest-growing surface; and production, to identify the types of content with high production values that get watched on big screens.

YouTube has renewed some of its original shows, such as the Emmy-nominated Karate Kid sequel Cobra Kai, and will be introducing a new slate as well. This year, original videos won’t be behind a paywall, giving advertisers greater reach.

There are also a few changes for advertisers on YouTube TV, Google’s virtual MVPD. Last year, the ads running in the cable breaks on YouTube TV were offered as part of Google Preferred packages. This year, advertisers will be able to buy those avails on a standalone basis, Albert said.

Viacom

For Viacom, long defined by its declining cable networks, the NewFronts are an opportunity to high-light the company’s growing digital businesses.

“Viacom is still in the process of telling the market our story about this transformation that’s happened over the past couple of years; about the progress we’ve made in digital, the investments we’ve made and how we are a very different company,” Kelly Day, president of Viacom Digital Studios, said.

A big part of Viacom’s NewFront presentation will orbit around Pluto TV, the ad-supported streaming service acquired last year. Pluto contrasts with Netflix and the upcoming Disney+ service, which are ad free.

“There’s a lot of momentum around the SVOD space right now,” Day said, noting Viacom was being contrarian by aggressively trying to grow an ad-supported platform. “I think people are going to wake up in a couple of years and say, ‘Wow, that was really smart.’ ”

Viacom’s digital video impressions this year will increase to 3 billion from about 1.5 billion a year ago, Day said. Next year, with Pluto TV, “we’re predicting that’s going to grow to 5 billlion,” she said.

Hulu

Earlier this year, Hulu became majority-owned by The Walt Disney Co. Last year, Hulu’s ad revenue jumped 45% to $1.5 billion. CEO Randy Freer recently said ad revenues would will double over the next couple of years.

Aidy Bryant in Hulu's 'Shrill'

Aidy Bryant in Hulu's 'Shrill'

”There’s been a real exodus from traditional TV to streaming,” said DeTraglia, Hulu’s research head. “You can reach people on Hulu that are no longer watching linear TV or watching it in different ways.”

A more viewer-friendly ad experience has been a foundational part of Hulu. The service has maintained a restrained ad load. In some cases, viewers get to choose which ads they watch.

Hulu is looking at other ways to make advertising a less-intrusive experience. “Within three years, we want 50% of our revenue to come from non-interruptive ad experiences,” DeTraglia said.

Earlier this year, Hulu announced a new product that puts an ad on screen when the viewer pauses the program. Hulu is also working on ads specifically designed to be shown when a viewer is binge-watching a series.

Hulu is also expanding its work in measuring the effectiveness of its advertising campaigns. “Hulu really looks and talks like TV, so it really is TV,” DeTraglia said. “We just have all these capabilities because of the way we’re delivered.”

Twitter

Video is a growing part of Twitter’s advertising business, with revenue from video crossing over the 50% mark for the social-media platform. “Our content is differentiated by our users,” Kay Madati, Twitter group vice president and global head of content partnerships, said. “People really participate in conversations generated by things that go on in the real world. You take the user behavior of an audience like that and that’s our superpower. That’s our unique value proposition.”

Twitter has been increasing the number of content partners it works with to create video content, as well as the number of advertisers, Madati said.

But more important is the level of creativity that thow partners are bringing to the content on the platform, he said. Take the NBA, which for the first time put a separate feed of live game content on Twitter this season.

While demand for digital video appears to be growing, Madati said advertising clients are getting more demanding. “People are asking harder questions around engagement,” he said.

“They want to know what separates the content on one platform from another.”

Ellen Digital Network

Ellen DeGeneres’s popular syndicated series has spawned the Ellen Digital Network, which generates more than a billion views a month. The network is built on DeGeneres and her 210 million followers and subscribers across all social media platforms.

With 16 years of TV production experience under it belt, The Ellen Digital Network is a video-first property. In addition to supporting the show, “we create original content. We have a fantastic pipeline of stars and human interest guests and we love to turn those into digital properties that can exist across all of our crossplatform handles,” Michael Riley, general manager of Ellen Digital Ventures, said.

A year and a half ago, EDN started the Emmy-nominated Momsplaining With Kristen Bell, sponsored by Johnson & Johnson. Later it added Fearless, a show with body-authentic supermodel Ashley Graham that was sponsored by Total Wireless.

“At this year’s NewFront, the Ellen Digital Network aims to make sure media buyers are aware of Ellen’s expanding business and to introduce a new slate of shows that will be open for business with advertisers,” Riley said. “The great thing about the demographics in the digital space is authenticity is at its core. We know that the younger demographics will just reject anything that’s not authentic.”

Condé Nast

Condé Nast Entertainment is emphasizing its publishing brands as it ramps up its video output. “We’re certainly in the video game in a bigger way than ever before,” Katzeff said.

Condé Nast is looking to create engaged audiences by cranking out content audience are excited about and spending tons of time with. Last month, on YouTube alone, Condé Nast generated 1.9 billion minutes of watch time. In February, it launched a Bon Appetit streaming channel for smart TVs and connected devices.

Several of Condé Nast’s more popular shows are being renewed, including Bon Appetit’s Gourmet Makes With Clair Saffet, Vanity Fair’s Lie Detector Test (yes, they hook celebrities up to a polygraph) and Technique Critic from Wired. A slate of new shows will also be announced during Condé Nast’s NewFront presentation.

“The data has told us viewers want longer content,” he said. “We’re trying to deliver it to them.”

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