Last year, more than 4.8 trillion display ads were served online, according to a new ad campaign breaking today by online ad network operator Undertone, adding: “How many do you remember?” To make sure you remember it, Undertone isn’t using the medium it pitches to advertisers and agencies -- it’s utilizing television. In an unusual media buy for a B-to-B marketer aimed at a relatively small industrial audience, Undertone has purchased two 30-second spots in tonight’s season premiere episode of AMC’s “The Pitch,” a new reality series about agencies competing for an account pitch. Granted that a higher-than-normal share of ad industry executives are likely to be tuning in to the AMC series, but Undertone is likely to generate some buzz simply from the fact that it is utilizing TV to pitch an online ad platform aimed at a relatively small audience of media buyers. The exact CPM of the buy may not be calculable, as Nielsen data doesn’t break out viewers in terms of the industries they are employed in, but it is likely to be pretty pricey in terms of relative reach. Undertone did not disclose what it was paying for the two 30-second TV spots, but AMC generally sells “The Pitch” in packages based on three airings -- the original, plus two repeats -- for about $56,000. Assuming Undertone paid those rates, the TV campaign will cost the online ad purveyor more than $100,000. If it is successful, it will live up to its branding promise -- “Standout and be remembered” -- but it will have done it by using television, not the online media it pitches advertisers to use. In fact, the TV commercials go out of their way to point out how forgettable online ads actually are.
Happy Monday! There is lots of speculation in today’s Video Daily Roundup, starting with a report that Hulu is considering a move to a TV Everywhere-type authentication model. Next, Apple is reportedly negotiating a content deal with the multi-studio venture EPIX. GroupM’s Rino Scanzoni takes us through the problems with the much-heralded Digital Content NewFronts. CBS’ David Poltrack tells us why online video viewers are worth more to advertisers than TV viewers. Finally: a Russian video company strikes content deals with major Hollywood studios. Source: Hulu Considers Authentication Model Sources tell The New York Post that Hulu, the joint video venture from News Corp, Disney and Comcast, is considering a change to a “TV Everywhere” model, whereby viewers would have to prove they are pay-TV customers in order to watch shows through the popular online service. These sources also claim this authentication model was behind the move last week by Providence Equity Partners to cash out of Hulu after five years. A separate report from the NY Post says that NBCUniversal, in its first Olympics under Comcast’s ownership, is considering a similar authentication model for the games in London this summer. The move toward authentication would certainly result in a shrinking audience for Hulu, which earned $420 million in ad revenue last year. It also comes at a time when just about every cable and network operator is considering its streaming strategy. Sources: Apple Close to EPIX Deal, New TV Product Apple Inc is in negotiations to stream films owned by EPIX on Apple TV and its other devices -- including a long-awaited Smart TV -- Reuters reported on Friday, citing unnamed sources. The talks are still preliminary, and no agreement is considered near, one of the sources said. Apple is expected to unveil a new TV product later this year or in 2013. EPIX is a three-year-old joint venture between major studios Lions Gate, MGM and Paramount Pictures. TV networks and film studios, uneasy about the manner in which Apple disintermediated the music industry with iTunes and its various devices, have largely boxed Apple out of licensing their content. The iPhone maker, which has become the world’s most valuable corporation, tried unsuccessfully to secure agreements with the studios for a new TV service last year, one of the sources said. The Problem with the NewFronts The so-called Digital Content NewFronts wrap up this Wednesday, after two weeks of top online video publishers like AOL and Hulu parading their content in front of brands and agencies in the hope that they can attract TV dollars from their closely held budgets. It’s all “kind of absurd,” says GroupM Chief Investment Officer Rino Scanzoni. While nobody is saying that Web video content doesn’t matter, Scanzoni points to two glaring problems with the Web video market that make the urgency for an upfront seem a little ridiculous: a lack of consistent measurement, and the fact that on the Web, content choices are infinite and audiences are unpredictable (whereas TV offers scarcity and universal measurement). However, Scanzoni is optimistic about initiatives like Nielsen’s Online Campaign ratings, which aims to bring gross rating points to online video, but at the moment, only a few publishers use the product -- while others, including Google, offer competing GRP services. Poltrack: Streaming Viewers Worth More Than Live TV Viewers The online video advertising industry has reached a “significant tipping point,” according to CBS Chief Research Officer David Poltrack. At a recent industry conference, Poltrack claimed: "a viewer streaming our program online is now worth substantially more to us than a person watching that program in playback mode and skipping many of the commercials." He added that the value (to advertisers) of the online video viewer is surpassing that of the live-TV viewer, too. Analyst David Charmatz also believes that despite the rise of subscription services like Netflix and Hulu Plus, the future of streaming TV will be ad-supported, mostly because many consumers simply aren’t willing to pay for content. While they willingly hand over money for apps and ringtones, “there is a whole group of people -- millions or potentially billions of people -- who don't see the value proposition in buying content.” Russian Video Service Reaches Deals with Hollywood Majors Russian company ivi.ru has become Eastern Europe’s first online video service to license content from Hollywood’s major movie studios. The deals total some 65,000 items of video content from the likes of 20th Century Fox, Walt Disney, Sony Pictures, Warner Bros., Paramount Pictures and NBC Universal. “The reached agreements are an important step for the development of the legitimate video market in Russia and fighting piracy in the digital content industry,” said Oleg Tumanov, chairman of the board and managing director of ivi.ru. According to research group Romir Gallup International, ivi.ru is Russia’s leading online video service, with a market share of about 30 percent. The company’s revenue streams include advertising, pay-per-view and subscription models.
The ubiquity of the Internet and the normalization of device-based connectivity in all aspects of American life have been chipping away at the old presumption that younger demos were the most feverishly connected. Did you ever try to distract a 35- to-45-year-old mom from a heated game of head-to-head online hearts? Good luck. You can put aside most received notions of age, gender and Internet use when it comes to tablets. According to Nielsen’s latest data drop from its State of the Media survey, the demographics of tablet use while watching TV are remarkably even. Overall, Nielsen finds that 69% of tablet owners are using their device with the TV on at least several times a week, with 45% working the two screens at once every day. Email checking generally on tablets during TV time (61%) is the prevalent activity, but for the 35- to-54-year-old and 55+ segments it spikes to 65%. Sports score lookups (34% of all tablet owners) were also popular, with 44% of males and only 24% of females checking on games. Nielsen’s stats suggest that the connection between tablet activity and the content on the TV screen is encouraging for programmers and advertisers. They found 22% of tablet users looking up coupons or deals they had seen on TV, with the highest amount of that activity (29%) occurring among the 18-34 segment. The good news for advertisers is that 27% of tablet owners say they have looked up product information for an ad they saw on TV. Indeed, that behavior is higher (27%-29%) among the 13-54 range, falling off only among 55+ users (22%). Women are slightly more likely to do product look-ups than men (28% vs. 25%). The prospects for tandem programming seem bright as well, with 37% saying they had looked up information related to the TV program they were watching. In fact, the second-screen experience was engaged evenly across demographics, with all of the age demos and both genders within four or five percentage points of one another. It seems that as of now at least TV programmer can count on more than a third of their target audience with tablets being willing to make the TV-to-tablet connection. Finally, the energy around so-called “social TV” may not be undeserved. Aside from email checks, accessing the social network (47%) is almost a majority activity among dual-screen users. And here is where the demographic differences do still show. While 62% of the 13-17 segment check their social nets with the TV on, that drops dramatically to 50% of 18- to-34-year-olds and 47% of 35- to-54-year-olds. If TV networks and marketers want to reach audiences on the second screen during prime time, the social networks may be the most direct route. Perhaps even more dramatically than we saw the smartphone disrupt the retail space last year, tablets and smartphones will fundamentally alter the way we think about the TV experience this year. The rapid adoption of mobile technology is something we have become accustomed to seeing in recent years. What is especially impressive about the tablet/TV combination is just how rapidly the tablet device has settled into a kind of ritualistic use during prime time. For most tablet owners, prime time is tablet time. This is important because it opens up for programmers and advertisers the expectation of a live and interested audience on this second screen with the same kind of regularity that traditionally they expect from a prime-time audience. While obviously the tablet is an interactive and highly personalized experience, it seems to me there must be opportunities to think about something like “appointment content” on this device in a way you can’t on smartphones or even the Web. Whether as a complement to the main TV screen or simply as a portable TV itself, this may be the interactive TV (ITV) everyone has been pursuing for decades. The full Nielsen breakdown of tablet and TV tandem activity is in its new report.
While new-media/technology business plans and elevator pitches have forever salivated about how television was a $70 billion market ripe for disruption, actually television advertising cracked the $70 billion mark for the first time in 2011, up 5% from 2010. That’s right, folks: TV advertising is getting bigger, with no sign of slowing down. The reality is that the hyper-fragmentation of audiences is making television’s mass media appeal more enticing to advertisers. After all, as a wise man once told me: “Targeting is overrated; everyone buys soap.” Considering that the Internet’s main promises are targeting and tracking, that’s a bad omen. In fact, you can almost argue -- no matter how reluctantly -- that the Internet, social media, tablets etc., are helping television grow. I watch more TV today than I have in the past ten years, even though I may occasionally have multiple screens on when I do. Indeed, according to Nielsen, "45% of tablet owners watch TV and use their tablet together at least once a day. A whopping 69% say they do so at least several times a week and only 12% say they never do this," writes Frederic Lardinois in TechCrunch. In other words, while we’ve certainly seen a shift of consumer mindshare from print, radio, and yes, television to the Internet, the jury isn’t only out on whether the Web helps or hurts television, as of now, the jury has rendered its verdict: the Web is definitely helping. There’s no doubt that growth rates favor the Internet. Online video advertising in the U.S. grew from $1.4 billion in 2010 to $1.8 billion in 2011 -- a more than respectable 29% annual growth rate. Total online advertising in the U.S. grew 22%, to $31 billion. Meanwhile, TV advertising grew 5% to $70 billion. But therein lies the problem: my company’s revenues grew 75%, but the absolute number remains rather light, so getting over-excited about growth rates alone is disingenuous, doing a disservice to everyone hoping for the pie to grow to the point where it can feed everyone. That applies equally to content producers and distributors, albeit in different ways. It’s pretty clear that distribution is a winner-take-all sweepstakes (or rather, top two or three). But it’s almost more daunting for producers as a whole at a time when cheap technology and “filterless” distribution lead to a democratization of publishing. The bottom line is that the online video pie’s not growing fast enough. This column has highlighted the reasons for that underwhelming trajectory: overreliance of in-banner ad distribution; lack of good content with meaningful distribution; the difference between what users watch, distributors feature and marketers want to associate with; lack of funding for content; massive oversupply of ad inventory pummeling prices, etc. If you reread that list, it sounds very contradictory. But what the Web lacks and was/is television’s ace, perhaps, is programming. After all, the reason why you both have a lack of good content with meaningful distribution AND an oversupply of ad inventory pummeling prices is specifically due to the difference between what users watch, distributors feature and marketers want to associate with. Only if you program the content better do you create the kind of economics and environment that will make advertising work online. Of course, given the democratic nature of the Web, that might be impossible. In March, for example, the number of video ads doubled annually to 8 billion -- thanks in no small part to YouTube -- but viewers are pleading “no mas, no mas” as is. This is why so many in the ecosystem hope that branded content will emerge as a viable form of advertising, but that will only occur if the content and advertising are balanced by the viewer’s standard.
Will there be more value, real and perceived, in the upfront this year? And not just for TV, but for the usual wannabe media suspects? All U.S. TV advertising was up 5% in 2011 versus the year before, to $71.8 billion, according to Nielsen. Olympics and political spending could improve this year’s growth to 6% to 7%. Perhaps around $20 billion or more of that $70-plus billion will be inked during this summer’s upfront negotiations. All this growth signals that TV is still a big deal for broadcast networks, cable networks, syndicated programmers, TV stations and local cable. As for the wannabe upfront media, online video should grow 22%, to $2.3 billion, this year. How much, if any, of that will go upfront? Hard to say, but perhaps some of it should. Depending on estimates, according to eMarketer, it appears as though all advertising spending could grow around 2% to 3.5%, to some $160 billion. Overall Internet spending should grow at about the same level – 23% -- as online video, to just under $40 billion. Print could drop to around $34 billion, from $36 billion. Lest people forget, at least a decade or more ago, there was plenty of talk about how TV marketers didn’t really need a national upfront. That didn’t work out. With that in mind, and with big dollars still at stake, big online players -- YouTube, AOL, Facebook, Yahoo!, and Hulu, among them -- are pushing their own upfront this week, the so-called “newfront.” Non-TV media looking to glom onto TV’s upfront market isn’t a new idea. Years ago, some big magazine groups tried their luck with “upfront” presentations. Hmm…where did that go, exactly? All this has gotten TV Watch thinking about other upfront contenders: radio, out-of-home, newspapers, local digital, promotional, direct mail. Some say that for all of this to happen, there needs to be a “scarcity” issue like in network television -- some piece of content, program or asset, that marketers desire to lock in months in advance. New-media analysts might say the “scarcity” thing is a myth. All you need is to hit the consumer at the right time with the right message. Content is important, but it’s everywhere, and seemingly seeking a lower level with other content -- at least when it comes to TV network and some cable shows. At the same time, media usage is growing. By some accounts, the average U.S. citizen interacts with 11 hours of media or communications a day. What’s a marketer to do? Buy everything “upfront” for an entire year or season == and then take a vacation? Or tinker with media plans all year round? Perhaps the growing world of all media needs both an upfront market to set some bases and also short-term activities -- especially those where marketers can experiment with newer media alternatives.