Amid TV’s Torpor, Sellers Back a New Front

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Unlike their counterparts with the traditional television networks, executives selling online video see a strong market ahead.

“I think that the digital side of the equation is on the right side of history,” Peter Naylor, senior vice president of advertising sales at Hulu, said. “I say that because you watch how viewers are shifting their habits. The rise of VOD consumption is undeniable and people are getting more and more comfortable time-shifting their viewing, whether it’s through VOD mechanisms or just good old DVR.”

Tara Walpert Levy, managing director of agency sales at Google said: “It’s been a very big year. Not just for advertisers but also for consumers. You look at consumer trends and how rapidly they are moving to online video, even though that trend was obvious last year, I don’t know that anyone was predicting it would have moved as fast as it has.”

Digital video — along with mobile — are the fastest growing parts of an otherwise sluggish advertising market. Media agency ZenithOptimedia forecasted that online video’s share of marketing spending will rise from 2.1% in 2014 to 3.9% in 2017. Most year-over-year predictions are for robust double-digit percentage gains in revenue, contrasted with the flat-to-down outlook prevailing across much of traditional TV. The influx of dollars is bringing a surge of contenders. As the fourth annual Digital Content NewFronts get under way April 27, a record 33 companies are set to make presentations to media buyers, up a full 50% from last year.

Evolving NewFronts

While some former NewFront participants — such as Sony’s Crackle, Microsoft, NBCUniversal, CBS Interactive and The Weather Co. — have decided to forego the hoopla of the NewFronts, giants including Google and YouTube, Hulu and Yahoo! remain tentpoles for dozens of smaller outfits trying to make an impression.

“I think it’s an evolution. Some of the traditional video companies that had participated in the NewFronts have stopped, and there are many niche or long-tail video providers that are in this year,” John Nitti, chief investment officer worldwide for ZenithOptimedia, said. “I think last year we also saw the evolution or maturity of some of the players in the NewFronts, like YouTube.”

Said Naylor: “I like to be where the other big guys are because we’re a big guy,” explaining why Hulu is back at the NewFronts. The streaming video site will be showing programming including Amy Poehler’s Difficult People. “Upfront events are really good opportunities to tell the world where you are, how you want to position yourself, how you want to be seen.”

Naylor notes that in the early days, some companies went to the NewFronts and expected to walk away with insertion orders. “It doesn’t work that way,” he said. “I’ve got a grown-up sales force covering the biggest marketers in the country. Despite the fact that they’re out there all day every day, things like this give them a lot of coverage and publicity. It tells content providers and content marketers that we’re a wonderful place to look when they’re trying to get their story out there.”

This will be the first time at the NewFronts for Discovery Communications’ Digital Media unit. “We felt this year the stars had aligned,” Sean Atkins, general manager and executive vice president, digital media and strategy, said. “That there was enough scale and enough interest from advertisers, that digital video had taken such a meteoric rise and that that really this was time to bring our story out into the marketplace.”

In the last few months, Discovery has launched two new online networks: Seeker, a travel and adventure channel, and Super Panic Frenzy for gamers. They feature original programming, as well as native advertising for major brands including Toyota and Michelob. “We have the premium brand permission that advertisers want. And when you make the original at the scale that you can, you can do native integrations on a scale most people can’t do,” Atkins said.


A year ago, YouTube used the NewFronts to roll out its Google Preferred program, which packages ads next to YouTube’s most popular content and provides metrics and guarantees that look more familiar to TV advertisers.

This year, YouTube will be showing off the program’s results, which included an 80% increase in ad recall and a 17% increase in brand awareness for campaigns over the course of a year, said Walpert Levy.

She declined to say how much YouTube’s ad revenue increased because of Google Preferred. But “what I would say is, if you look at 100 big brand advertisers who participated in the program last year, 30 of them had never participated on YouTube before at all and they’ve gone on to become strong partners of YouTube over the course of a year,” she said. “The offering and the approach is generating deeper and broader commitments to YouTube.”

At the same time revenue growth for people who create content that appears on YouTube rose, with the top 100 creators earning 70% more than a year ago.

YouTube thinks it is important to be in front of advertisers at this time of year. “Whether it’s the New- Fronts or the upfront or a combined front, it is a time when everybody is paying attention and so it’s a good opportunity to showcase some of these stars,” she said.

The Weather Co. has mounted its own upfront events and participated in the NewFronts over the past few years, but has decided it is better off holding one-on-one meetings with advertisers.

At the NewFronts, “clearly you can have no content but put on a circus and have people wrapped around the corner trying to get in,” Weather chief revenue officer Curt Hecht said. “People show up and leave and there’s really no track or action path to know if there was a return on your effort.”

Instead of the NewFronts, Weather’s sales team was instructed to have more individualized, strategic conversations.

As Weather has become more data-driven and technology related, and about how individual clients’ businesses are affected by weather, Hecht said, it’s harder to talk about from the stage at a big venue.

At this point, Weather sees the annual Consumer Electronics Show as an important venue for meeting with its biggest clients. “If I look at the last two years, those meetings have led to more business growth than upfronts or NewFronts,” he said.

Despite Weather not participating, Hecht forecasts that the New- Fronts will be around for a while. “The agencies like to go out and so do the clients,” he said. “You’ve got a whole ecosystem sitting underneath it that’s making money by sponsoring it or hosting it.”

But Zenith’s Nitti isn’t sure about the NewFronts’ staying power.

“I’ve always viewed the New- Fronts as a separate two weeks on top of all the other meetings we need to take in as being something that was a stopgap and is not going to be sustainable,” he said.

“The online video space keeps maturing,” Nitti said. “I think you’ll see it go the route of the cable upfronts. You have a lot of folks who are saying we’re not going to do the big dog-and-pony show in a theater. We’re going to come and do it specifically for your agency.”

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.