Whether the NewFronts will spark a TV-style upfront market isn’t clear. But, the first-annual series of events have already been a huge success from a marketing perspective.
The NewFront brand has been established. It already has meaning. It has drawn the attention of industry executives, the press and even Wall Street. The discussion about how -- if -- a NewFront sales marketplace will form is a victory in itself. The worst fate would have been being ignored.
The ad community now knows that starting each April, Hulu, Google/YouTube and others will hold a series of presentations touting their programming and advertising opportunities -- just as the broadcasters do annually in mid-May. Advertisers and agency executives can make travel plans and cancel vacations.
Each year as online video continues to boom, interest is likely to build. For now, even if the presentations – which continue with Yahoo today and conclude with Google/YouTube on May 2 – don’t produce any extra dollars, just getting the online video tour off the ground has been an organizational and PR accomplishment.
The effort to grab attention calls to mind what ESPN, Turner and now USA have done by crashing the broadcast upfront week and holding their presentations next to ABC and CBS, advancing an argument that what they offer should be considered alongside them. It might take time, but that's what Hulu and cohorts are seeking to accomplish with a NewFront – gaining an equal seat at the planning table.
“It’s definitely about positioning themselves in a manner to try to equalize the dialogue,” said Donnie Williams, Chief Digital Officer at Horizon Media.
The clever NewFront moniker was conceived by Digitas and the agency has been a driving force in bringing competitors -- AOL, Google/YouTube, Hulu, Microsoft Advertising and Yahoo -- together to hold presentations in concert. In the past, there have been one-offs, which haven’t registered much.
So far, the online sellers have managed their chance in the limelight with aplomb. Perhaps, they realized that simply touting their original content might draw notice, but not enough. Pessimism and second-tier status still seem prevalent when the words “Web series” are mentioned – even if there are efforts to make it long-form and broadcast quality.
So, they smartly have made announcements about how they are offering ROI opportunities similar to, or even potentially one better than, TV. AOL said it would offer TV-style guarantees to advertisers, where audience delivery would be based on demographics, not clicks or impressions. Hulu promised advertisers they would only have to pay if their ads were viewed in full. Microsoft said it has signed a slew of new partners, including CBS Interactive and ESPN, to accept TV-type spots within apps on Xbox Live.
That’s not to say programming announcements have been dismissed. On Wednesday, Wall Street analyst David Joyce of Miller Tabak + Co. issued a report after attending the AOL event, where he evaluated the presentation within the context of company's value, as he might have looked at how new programming at CBS would help the company at large. The showcase demonstrated how “the long-held notion that AOL is focusing on being an online content company in order to drive engagement and grow advertising revenue is finally coming to fruition,” he wrote.
Still, it is not hard to find doubters on whether a standalone NewFront market will gain traction. Does it make sense to buy online inventory – even on premium sites – so many months ahead? The TV market succeeds because the amount of inventory is limited, but there is a perception online video real estate isn’t crowded.
“It’s going to take a while for there to be this dynamic where agencies and advertisers look at it and say, ‘Gee, I want to make a long-term commitment to an eight-minute program that’s going to run maybe over the course of a month or so,” Chris Geraci, who leads national broadcast buying at OMD, said recently. “The whole upfront proposition doesn’t really make too much sense in that world yet.”
Ed Erhardt, who heads sales at ESPN, said he’s “not sure there’s enough inventory that can create a marketplace that people feel they have to buy now or they’re going to miss something.”
Still, ESPN is taking advantage of the NewFronts. Besides its new effort with Microsoft, it is inviting a slew of digital buyers to its annual pre-NFL Draft party Wednesday, which some might confuse with a sales pitch. ESPN pushes digital as part of multi-platform agreements and says 75% of its deals valued at $2 million or more involve at least two properties.
In a NewFront market, Hulu could be a notable exception and draw more long-term deals. All sites (including those affiliated with networks) could benefit if the TV market is particularly robust. If massive advertisers such as Procter & Gamble and auto advertisers can’t secure enough inventory and need to look elsewhere, online video could offer an outlet.
Horizon’s Williams offered encouragement to the leading online video outlets, saying his agency might cut NewFront-type deals around the same time it inks upfront TV commitments. At Horizon and other agencies, there are discussions about using the NewFront as a venue to shift dollars out of TV. It doesn’t hurt that a Yahoo or YouTube is there if much of TV is viewed as too expensive.
Still, Williams said advertisers have a tough time shifting focus from the upfront as TV continues its primacy for many of them. So, the NewFronts are sort of a sideshow.
“From my perspective, clients don’t seem to be viewing this as something unbelievably unique,” he said. “It’s generating a lot of questions and generating a lot of feedback, but it’s not changing behavior.”
For now, NewFront sellers should take pride in the interest they've created. It’s a rookie success story.