For years, the digital industry used the TV upfronts as a symbol for all that’s wrong with TV. They’re showy and without much substance, the argument goes, and they’re a symbol of the inefficiency of the TV world committing money to shows that might not appear at all or quickly fizzle.
And all the while TV ad spending, in step with the upfronts, has continued to grow. Now it appears the online world has decided if you can’t beat ’em, join ’em. There are now over a dozen digital media ad sellers holding their own version of upfront presentations in the hopes that they can raise the profile of original Web content and maybe even book a bunch of revenue upfront thanks to these sneak-peaks. Hulu, for instance, brought out Smash star Megan Hilty at the TimesCenter in Manhattan to sing for agency buyers yesterday as it unveiled a slate of original programming, including a comedy series by Seth Myers. Other digital upfronts are happening around New York City over the next two weeks.
Hulu, Yahoo, YouTube, Microsoft and AOL have joined with Digitas to create the “Digital Content NewFronts” to trumpet high-quality Web series and to persuade advertisers that the digital video industry has matured to the point where they should make commitments ahead of time rather than lose out. Others like DECA, Vevo and Alloy Digital are holding their own presentations.
The problem is that unlike TV, where upfronts are dominated by scarcity, the online universe doesn’t have that dynamic. Ad buyers still have real doubts about the quality and scale of the online video industry. For that reason, the digital upfronts are bound to be little more than marketing exercises rather than a forum for huge chunks of money to move.
“Television is a futures market based on some scarcity of supply and reasonably predictable, though variable, demand,” said Rob Norman, CEO of GroupM. “Decisions made in that market can profoundly affect the price paid for inventory. The scarcity that characterizes the television market, particularly as it relates to high-reach programing, does not yet exist online.”
“I’m not sure it makes sense to get out there to make investments in the content you haven’t seen from content creators you don’t know,” said Dave Martin, svp of media at Ignited, at the Digiday Video Upfronts in Los Angeles yesterday. “I can’t see advertisers making big commitments coming out of that week.”
Even those holding upfronts admit the events are more about “putting a stake in the ground” for digital content rather than raking in big ad commitments from advertisers worried about being beat to the punch. Erin McPhersen, director of original programming at Yahoo, which is holding an upfront event, allowed that it will take at least a couple more years before they become huge generators of futures buying.
According to Razorfish chief media officer Jeff Lanctot, a confluence of factors — growing video budgets, improved quality of online content, and the way in which media is being bought (and planned) across multiple screens — makes the present the right time “to push forward” with this new approach.
“That said, it’s important to note that just because there is interest in upfront buys, it doesn’t mean there is a flight from accountability,” said Lanctot. “Inventory may be reserved in advance, but it will be measured with the same levels of scrutiny.”
There’s the rub. The online world, for better or worse, is held to accountability standards that are very direct-response in nature. While digital video saw a nice increase in 2011 — $1.8 billion in revenue compared to $1.4 billion in 2010, a 29 percent increase, according to IAB — the buying and selling of online video is not completely analogous to the television upfront.
And that’s why it’s more about marketing. Matt Wasserlauf, evp of platform and services for Specific Media, said the online world, accustomed to getting lost in the sea of tech acronyms, could use the sizzle. “I think it’s a great means to market ourselves,” he said at the Digiday Video Upfronts in Los Angeles yesterday. “We don’t tell our story well enough.”
“There’s a big opportunity for us to come together to showcase the best in quality content,” said Wayne Powers, svp of North American sales for Yahoo. “DCNF events will further serve to create a marketplace where providers and advertisers can connect.”
“The opportunity is for a brand to become aligned with various programs or pieces of content in the way that isn’t passive, that is much more integrative where video serves as a catalyst for fuller, more integrated opportunities on behalf of the brands,” said Jordan Levin, president of Alloy Digital. “Meaningful business will occur because the train will leave the station and someone will be on board. And if it’s perceived as important to a brand and they miss out on an opportunity, they’re not going to want to do so again.”
That’s, to put it mildly, an optimistic assessment.
“I wouldn’t expect a week out that we’ll have massive announcements,” said John McCarus, group director of brand content at Digitas, the agency behind the Digital Content NewFronts. “But I fully expect to see a shift in focus on opportunity, and it’s clear the conversations with partners before presentations that it has made a difference. It’s already triggered conversations that are new; to some extent we’ve already one without having a single presentation.”
When all’s said and done, these digital upfronts just aren’t ready for prime time yet. The audience is already fragmented, and it doesn’t seem like advertisers are completely buying into the idea that now is the time to take a risk in an environment that, to put it bluntly, doesn’t need them as much as television does.
“We’re approaching it with a little bit of cynicism, to be polite.” Meridee Alter, director of media communications at RPA, said at the Digiday Video Upfronts in Los Angeles. “I don’t think we’re going to be exposed to something in that NewFront like, ‘Oh my God, we’ve got to buy this now, or it’ll be too late.'”
More in Marketing
Q1 ad rundown: there’s cautious optimism amid impending changes
The outlook for the rest of the year is a tale of two realities.
WTF is the American Privacy Rights Act
Who knows if or when it’ll actually happen, but the proposed American Privacy Rights Act (APRA) is as close as the U.S. has ever come to a federal law that manages to straddle the line between politics and policy.
Here’s how some esports orgs are positioning themselves to withstand esports winter
Here’s a look into how four leading esports orgs are positioning themselves for long-term stability and sustainability, independent of the whims of brand marketers.