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To Grab Ad Dollars In Contest, Big TV Players Like NBCU And Viacom Must Break Out Digital Video

A group of media companies on Wednesday will be enticed into an arena of sorts and forced to compete to win ad dollars from blue-chip sponsors like Hasbro, Pepsi, State Farm, Petsmart, Walgreens, Levi’s, Hilton and CBS Corp.’s Showtime. To get the victory, however, they are likely to lean heavily on new kinds of media that are still in their relative infancy.

Who convinced outlets such as Sony, Discovery Communications, Viacom, Dreamworks and NBCUniversal to clamber into the fray? Omnicom Group’s OMD, one of the industry’s biggest buyers of ad time. In exchange for access to the company’s clients, the media outlets must pitch exclusive new ideas that give the sponsor the ability to place pitches in some of the hottest emerging venues – places like AwesomenessTV, Machinima and Maker Studios.

“A lot of these ‘convergence’ acquisitions that have been happening over the past few months are changing the marketplace,” says Claudia Cahill, chief content officer for OMD’s Content Collective, a unit that specializes in weaving advertising into content. “The clients are asking, ‘What is this Disney-Maker deal going to look like, and how is that going to change the offerings from either one of those companies?’”

The event, the second of its kind that OMD’s Content Collective, has organized, shines a light on advertising’s new future, one in which sponsors demand one-stop shopping from some of the media industry’s biggest names. Rather than placing the bulk of their spend with tried-and-true formats like television, the advertisers are likely to seek ideas that put their pitches in both traditional and emerging venues all at once. Bolstering the notion is the fact that four of the country’s largest advertisers – Procter & Gamble, AT&T, L’Oreal and Comcast – appeared to tamp down spending on traditional media in the second quarter, according to data released this week by Kantar Media.

Content Collective started the event, which it calls a “Final Front.” last year, and was able to secure deals for beverage giant Pepsi and beauty marketer Coty. The media participants are often selected, Cahill said, based on where OMD’s clients have deals already in place, or where OMD has previously struck a relationship.

Dreamworks will call attention to AwesomenessTV, the teen-skewing YouTube channel it purchased for $33 million in May. Warner Brothers will enter with Machinima, the videogame-focused YouTube channel in which it invested in March. Disney will be accompanied by Maker Studios, the multi-channel network it agreed to purchase in March for $500 million. Sony, which is hosting the event, will burnish its Crackle streaming-video site. Other entities, like IHeartMedia (until recently known as Clear Channel) and Twitter, will team up to make a pitch. And some big players, like NBCUniversal, Discovery and Viacom, will display the breadth of the various assets under their corporate umbrellas.

In the past, the media outlets might have put the spotlight on new programming in the pipeline and solicited interest in putting a can of soda or a brand logo in the shows themselves. But new video consumption patterns have rendered the world more complex.

“One of the biggest factors is that people are now consuming TV in different ways — more and more viewers are going ‘over the top’ because of the emergence of TV networks that can be watched on the web, mobile apps, streaming devices and gaming consoles,” says James Smith, senior vice president of digital media sales and partnerships for Crackle and Sony PlayStation at Sony Pictures Television. “Viewing habits are evolving—digital consumption is now the norm.”

One participating advertiser says he is eager to get a first crack at new marketing opportunities that will help his company reach younger generations. “The online video market is growing by leaps and bounds,” says Ed Gold, advertising director at State Farm Insurance. Younger consumers “are consuming more video from an online standpoint, looking for new content that they like and would be interested in this.”

Other participating media outlets include PopSugar, AOL, Google, Time Inc. and Time Warner’s Turner.

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