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What are the implications of the NewFronts (digital upfronts)?

What are the implications of the NewFronts (digital upfronts)? Jeff Hinz
Yes, it’s an industry first.  And yes, it’s taking a cue from broadcast television by following the money.

The key participants of the this year’s Digital Content NewFronts (Hulu, Microsoft Advertising, AOL, Yahoo, Google/YouTube, Vevo, Disney) are telling us as Steve Jobs once did: to think differently. This different thinking is evident as the digital content landscape continues to evolve, as people continue to shift, integrate and multi-task with media channels and on devices.  Broadcast and digital are becoming more integrated.  The time people used to spend watching is now spent interacting, socializing and searching.  Video content is being pushed and pulled to all devices and consumers are watching video everywhere they go.  But what will they watch down the road?

The mission of the Digital Content NewFront (DCNF) is to shape a new marketplace for connecting the wealth of native digital content with brand marketers and their media and marketing agencies.  Similar to the Broadcast Television upfronts, the DCNF’s goal is to bring together a media industry comprised of the digital content space, brand marketers, investment, planning, across all media for a two-week series (April 19 – May 2) of events focused on digital content and media.

Before we move forward, let’s go back a few years.  Broadcast TV is bought in an upfront manner for two reasons: price and inventory guarantees.  Advertisers, fearing inflation over the year, want to lock in the lowest rates possible and get a guarantee of delivery.  Additionally, as the number of commercials in a program is fixed, advertisers also do not want to miss out on an opportunity to see their brand in a specific program.  So, in the ever-changing world of digital, would I want to commit dollars for an entire year, not having anything left for the next big thing?

Digital video publishers are trying their hand at this game, believing that by generating original content, they can create the same supply and demand dynamics in the marketplace.  YouTube invested 100 million dollars in original programming, Hulu is complementing its broadcast programming with more than nine original offerings, and Vevo is starting to look like MTV.  Ultimately, viewer behavior will determine the preferred programming.  Will they be willing to watch original programming on Hulu, where they are looking for that missed broadcast opportunity. It feels like YouTube will win here presenting original content since it really is just a big search engine.

Now, it’s time to argue the value of lean-forward and lean-back viewing.  Nielsen has its formulas, offering guarantees based on Nielsen's new online campaign ratings system, which purports to group digital television viewers into gross rating points-like collections of unique ad-watching users.  Even the CW Network recognizes that 70% of its audience leans forward, thus packaging both experiences into its total ratings delivery.  Supporting this proposed value of lean-forward, digital Newfront CPMS are looking to be twice that of traditional broadcast.

The bigger question is, who is buying the digital video?  Is it the domain of traditional TV buyers or the new dawn of digital specialists?  TV buyers will argue that if it is coming from the TV.coms then they should place integrated schedules using C3 ratings and fully-loaded commercial breaks.  What’s left for the digital specialist?  Hulu and YouTube might be the only scale in town.

So, what are the implications?  There is more inventory available than ever before for your video distribution.   It’s all digital, especially since TV stations stopped broadcasting in analog a few years ago.  You need to make your decisions based on meeting your client’s goals and expectations.

Finally,  the real game starts in two weeks when the traditional broadcast upfront begins because money does make the world go ‘round.

Jeffrey Hinz joined MediaCom in 2011 as Managing Partner, Digital Director. In this role, Jeff oversees the agency’s United States digital operations and provides thought leadership and strategic guidance for all existing and emerging digital...

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