Bigger Upfront For Digital Video Ad Dollars? Not Really -- And It Won't Come Cheap

Digital and online platforms won’t be eroding much traditional broadcast and cable upfront dollars -- not unless marketers like to spend more money per thousand viewers.

This is the time of year TV advertisers may be looking for alternatives to the high-priced CPMs of network and cable television. But that doesn’t come with general online video -- even so-called premium online video. Generally, it’ll cost marketers more to access those platforms for premium TV programs -- higher CPMs on average -- at least versus cable.

Traditionally when marketers have looked at lowering their overall CPMs, due to the high price of broadcast network, they looked to the likes of cable and syndication TV, which came be anywhere from 15% to 25% more efficient on a comparable demos.

A majority of the $4 billion or so that goes toward digital video advertising is for TV programs from the big media companies, the same ones that also run big TV broadcast and cable networks. To any extent, buying into those deals now during the upfront plays into those company's hands.



You might consider the fact that there is less commercial clutter online; no skipping of commercials; and better return-on-investment metrics. But for many advertisers, it’s not possible to get all the media weight one needs in terms of comparable reach and scale. More importantly, for much of those premium TV digital video avails -- those network TV programs -- there is also a severe inventory shortage. All that drives up the pricing to higher levels -- on a CPM basis.

So what’s the draw this season? Perhaps a little more experimentation, or R&D initiatives.

Upfront revenue estimates have been that cable TV networks pull in around $9.5 billion, with broadcast TV networks getting to $9.2 billion. In that regard, how much real money will move to the likes of Hulu, or the TV networks apps/web areas, or to a lesser degree to YouTube or AOL? Not so much.

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