NewFronts 2015 Preview: Digital Players Push Superiority to TV

34 companies slated to present at this year's series in New York, including YouTube, Hulu, Maker Studios, Vice, AOL

Digital Content Newfronts

At this year’s Digital Content NewFronts, expect to hear a recurring theme from Internet media firms: We’re a better ad buy than TV, especially for targeting younger audiences.

Over the two-week NewFronts run from April 27-May 7 in New York City, 34 companies have scheduled presentations — up from 22 last year. First staged in 2008, the series aimed at Madison Avenue types is coordinated by the Interactive Advertising Bureau.

The lineup includes Google’s YouTube, Hulu, Disney’s Maker Studios, Yahoo, AOL, Vice Media, Machinima, Defy Media, Endemol Beyond and BuzzFeed. In addition to those digital-first players, traditional media companies also will be pitching their Internet slates, including Condé Nast, the New York Times, Bloomberg, News Corp. and Time Inc. (View the full NewFronts schedule here.)

What’s behind the surging interest in NewFronts: “People are starting to understand that there’s a lot of money to be made in digital, beyond just YouTube,” said Alan Wolk, senior analyst for TDG Research.

In 2015, U.S. digital video-ad spending is expected to grow 30% to hit $7.8 billion, according to research firm eMarketer. TV advertising is far more massive — expected to reach $70.6 billion this year, up 3% annually — but the Internet players claim they have advantages television can’t match.

To Machinima CEO Chad Gutstein, the NewFronts offers a chance to spell out how digital is a better fit than TV for brands to get in front of younger audiences, as traditional TV viewing among millennials declines. His company, whose backers include Warner Bros. and Google, focuses on gamer and fanboy-oriented content for 18-34 male audiences.

“People are understanding that [content created on YouTube and other digital platforms] is not a cute little thing you’re doing,” Gutstein said. “I’m beginning to feel the tipping point has happened.” He said one of his favorite moments from Mip TV earlier this month in Cannes was this comment by AwesomenessTV founder Brian Robbins: “Everyone knows that traditional TV viewing for teens and tweens is dead. Not dying. Dead.”

The NewFronts began as an effort by Internet-video distributors to get on the radar of marketers who controlled video-advertising purse strings (i.e., TV budgets). The industry is now well past that, said Dawn Ostroff, head of Condé Nast Entertainment.

“When this started, people were making proclamations that they were worthy of attention,” she said. “But in a very short period of time it’s become much more important — digital is now an important part of the buy. The engagement in digital video is very significant.”

CNE has produced 135 shortform series over the last year and a half, representing some 2,500 individual videos, distributed across its stable of magazine brands like Glamour, Vanity Fair, Vogue and Wired.

“Our strategy is, you have a certain amount of content you’re going to make but you’re really selling across a network, so advertisers can buy a demo or a segment. It’s not unlike a television network,” said Ostroff, who previously was the CW’s president of entertainment.

Critics have pointed out that the NewFronts, while modeled after TV’s upfronts season, haven’t produced the same level of advertising commitments as in the television space.

Nevertheless, “There is tremendous interest from advertisers and brands to hear about what everyone is doing — whether or not they spend ad dollars the next day,” said Keith Richman, president of Defy Media. The company, formed by the merger of Alloy Digital and Break Media in 2013, counts YouTube comedy stars Smosh among its biggest properties.

At the NewFronts, “What you’ll see from us is just how deep the ecosystem is, and how the views associated with our brands are really strong relative to television,” Richman said.

But to Justin Barocas, founding partner of digital agency Anomaly, the NewFronts format doesn’t take advantage of the digital medium’s potential.

“The NewFronts is built on the old TV model,” Barocas said. “They’re saying, ‘Hey, we can run your television spots online!’ It’s just another channel, versus leveraging the core equity about what the brands and personalities do best.” He predicted that brands will increasingly start their own inhouse content-development units, rather than simply placing video ads.

At Google’s YouTube Brandcast presentation, the story will be focused on the Google Preferred ad program — launched at last year’s NewFronts — as well as the growing reach of YouTube as a video-ad platform and results from its TrueView program, which lets users skip ads they’re not interested in.

Google Preferred, an effort to sell premium ad inventory for some of top 5% of YouTube channels, will expand to more than 10 additional markets this year in addition to the U.S. and initial territories. Some of the stats it will likely trot out: The company claims the top 100 YouTube creators in Google Preferred saw revenue increase 70% year-over-year (versus 50% for creators overall). In addition, Google Preferred desktop users are 29% more likely to visit a brand’s website immediately after watching YouTube compared with total YouTube viewers, while nearly 10% of Google Preferred desktop viewers do not watch traditional TV (even online).

YouTube also will feature its latest ad campaign, launched this week, promoting three top creators: Grace Helbig, Hannah Hart and sports-comedy group Dude Perfect, best known for its trick-shot videos.

Yahoo, meanwhile, ahead of the NewFronts announced two new video-advertising products: a native-video program and video-app install ads. With native video ads, Yahoo will integrate sponsored-video segments into its homepage, digital magazines and apps. The video-app install ads will let marketers and developers promote apps across Yahoo and thousands of other apps through the Yahoo Gemini marketplace.

That said, the centerpiece for most of the NewFronts presentations will be squarely on content. There will be an even more pronounced shift by multichannel networks and other digital-focused companies toward original programming — as opposed to aggregating content, said Manatt Digital Media director Eunice Shin.

But “It can’t just be original programming — it has to be original programming plus a great user experience,” she said. “In a world of piracy, you have to create a service where people want to come to you.”