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Insight/ Online Media

Digital NewFronts: Online Video Prepares For Prime Time

by Mercedes M. Cardona
Contributing Writer
CMO.com

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Industry

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Article Highlights:

  • Digital video is now a viable business.
  • Viewers are becoming increasingly agnostic about what device they consume video.
  • It’s a mistake to think of online media as separate from TV.

The online video arena is about to get very crowded--way beyond cat videos. Online properties are going to market with more polished content--some made in partnerships with old-line media properties--and they are making a concerted effort to give marketers audience numbers that can compare clearly with traditional audience measures, such as TV ratings.

This year’s Digital NewFronts looked a lot more like their better-known cousin, the TV upfront presentations, when broadcast and cable networks show off their schedules to marketers and media buyers. It included appearances by celebrities including Sarah Jessica Parker, Steve Martin, Nicole Richie, Snoop Dogg, and John Legend, and even some announcements of major ad sales, such as when AOL CEO Tim Armstrong took to the stage to announce Razorfish had bought out all of AOL’s business channel inventory while its Newfront presentation was still going on.

“Digital video is now a viable business,” remarked Tony Weisman, CEO of Digitas North America. He said his back-of-the-envelope estimate would put the production costs for all of the programming being launched at the NewFronts somewhere past $1 billion.

“Netflix has more subscribers than HBO--who thought that would happen?” Weisman said.

TV With Benefits
Indeed, a number of traditional media companies are following media consumers and diving headfirst into online video. Print publishers The Wall Street Journal and Conde Nast, for example, both made their first-time appearances at the 2013 NewsFront to promote online video programming.

The effect is to make online video 2.0 look a lot more like network TV. Yahoo introduced a slate of 18 programs, including a comedy starring Cheryl Hines, a reality show with John Stamos, and an animated action featuring Ed Helms. AOL countered with 15 original programs, including a lifestyle show starring Richie, a reality show about the New York City Ballet produced by Parker, and a health program co-hosted by Gwyneth Paltrow. Hulu, moving from delivering TV and movies to making its own, launched a schedule of shows with stars including Eva Longoria and chef Mario Batali.

“The Web is turning into a video medium,” AOL’s Armstrong said. The company topped its slate of new programs with the announcement of a joint venture with Mark Cuban’s AXS cable network to carry its HuffPost Live online video stream as a daily six-hour block of daytime programming.

Many people had written TV off as a medium, but social media is driving TV watching and vice versa, so these cross-media deals make sense, said Cuban: “You have to be where people want to watch.”

Cuban was one of many NewFront presenters who noted that viewers are becoming increasingly agnostic about what device they consume video on--whether it’s TV, a smartphone, or a tablet--so the convergence of online video and TV is logical. Besides AOL, Yahoo also announced deals with a number of old-media producers, including ABC News, WWE, and the producers of "Saturday Night Live," to stream their content on Yahoo’s channels.

Online content from a premium publisher is a valuable ad medium, regardless of whether it was done for online or broadcast use originally, said Doron Wesly, senior director, marketing strategy of Tremor Video. “We feel it’s TV with benefits,” he said.

During the Internet Advertising Bureau’s presentation, Wesly presented research showing the main factor determining completion and engagement--whether viewers watched a whole online video ad and clicked on it--is the publisher of the content it’s on. Content coming from a premium publisher scores higher in both metrics, he said. Tremor showed the results of a study that analyzed the completion and click-through rates of online video ads, looking for differences between those ads shown on TV content repurposed online and programs created especially for the Web. No difference between the two was found.

“There is a focus now on being good and not just being loud,” said Adam Bain, president, global revenue, of Twitter. Indeed, the richness and interactivity of online video makes it a strong platform for brands when used well, according to several marketers in attendance. It can add more context and meaning to a brand message, said Mark-Hans Richer, CMO of Harley-Davidson.

“In the right context, your brand will thrive. Your brand will be alive,” Digitas’ Weisman said.

It’s a mistake to think of online media as separate from TV, Bain said. Twitter thinks of the two together, and recently signed deals with BBC America and Weather Channel to stream content on Twitter, he said. He also noted Nielsen will roll out a new rating this fall that combines TV viewership and Twitter activity numbers to produce a fuller measure of viewer engagement with TV shows.

“We are a bridge, not an island,” Bain said.

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Oranges And Oranges
But measurement remains an issue for online advertising. Mobile and social media data are still cast as “skunkworks,” said Jordan Bitterman, senior VP, North America, of Digitas. Many speakers brought up the old joke about an advertiser who knows half of his ads aren’t working, but can’t tell which half.

CMOs are under pressure to demonstrate a return on marketing investments, but “the beauty of technology is everything is measurable,” said Eric Hippeau, managing director of investment fund Lerer Ventures.

Marketers need to commit to demanding measurement tools so they can gauge and optimize their online spending, said Amy Kavanaugh, VP, public affairs and engagement of Taco Bell. The fast-food company has made a strong investment in online media and video because it’s relevant to its core audience, but it needs to justify the spending to management and its franchisees, she said.

“Demonstrating value will help us grow our digital commitment--because that’s where our customers are,” Kavanaugh said.

The online networks said they are working to upgrade their metrics to offer advertisers a clearer view of ad buys in the online space, and various companies announced moves to address that topic. Several announcements during Newsfronts targeted platforms and solutions meant to provide easier media buying and audience measurement.

AOL introduced a custom solution to gauge online audience, powered by Nielsen Online Campaign Ratings, that will produce an audience measurement more comparable to TV ratings. AOL also launched a partnership with MediaOcean, a software platform used for TV buying, and FreeWheel, an ad technology company, to offer AOL’s inventory in the same platform they buy TV ads.

“Instead of apples and oranges, we wanted oranges and oranges,” Armstrong said.

With the programming and audience measurement in place, online video has a chance to become an established medium for brand marketers, and to help online media reach maturity, said several industry insiders.

“I’m more excited about the next 20 years than the first 20 years,” Armstrong said. “I think video is going to change the world.”

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