A CYNOPSIS MESSAGE FROM DISNEY INTERACTIVE MEDIA GROUP

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Cynopsis Media presents:
Digital Upfront 2012 – The Digital Content NewFronts
04/16/12

Good morning. It’s Monday, April 16, 2012 and this is your first installment of a two-part series surrounding the Digital Content NewFronts.

 

Digital Content NewFronts: Who, Why and How?
 
By Sahil Patel

Opportunity. If there is one word that can best characterize the first ever Digital Content NewFronts (ideated through a partnership between Digitas, Google/YouTube, AOL, Yahoo!, Microsoft Advertising and Hulu) it’s opportunity. The NewFronts have been described as an opportunity for content creators to show off what they have created and what they are capable of producing; an opportunity for brands and advertisers to take advantage of the ever-growing audience on digital platforms; and an opportunity for both sides to finally meet and develop an effective and productive marketplace­”where brands, meet content.”

The DCNF offer another opportunity: To find out if this new marketplace can be viable, for digital content providers, agencies and brands.

The easy answer: Well, there is an opportunity.

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A CYNOPSIS MESSAGE FROM GOOGLE

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YouTube is On.

What do Sofia Vergara, Tony Hawk, Jay-Z, Rainn Wilson, Amy Poehler, and Stan Lee have in common?

They’re building the future of video on YouTube.

Watch some of YouTube’s newest channels: Nerdist, RIDE, BlackBoxTV, FAWN, DanceOn, Noisey, and see what 800M viewers around the world love and share every month.

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EYES ON DIGITAL

All you have to do is look at the latest data from the likes of comScore and eMarketer. They collectively indicate that there has been a noticeable consumer shift, where TV isn’t necessarily being replaced, but has found a burgeoning competitor for the eyes (and wallets) of consumers.

According to comScore’s most recent (as of April 11, 2012) Video Metrix report, 179 million U.S. internet users watched nearly 38 billion videos of online video content in February 2012. Every single founding DCNF partner (with the obvious exception of Digitas) is among one of the top 10 video content properties, when measured by unique viewers.  And two other exhibitors at the DCNF, including VEVO and NBCUniversal, find themselves in the top 10 as well. Couple that with an eMarketer forecast that sees 71% of the U.S. internet audience watching online video each month by the end of 2012, and it’s easy to see in which direction the winds have been blowing.

This opens up an opportunity for brands and advertisers to reach consumers on multiple platforms. “Advertisers want to create a cohesive experience for consumers. So for content owners, it’s not about just buying digital, it’s about helping advertisers create brand experiences,” says JoAnna Abel, VP/Marketing, FreeWheel. “It’s why you see traditional media companies like NBC and Disney participating in the NewFronts to bring together digital and traditional buyers and let them know that these multichannel experiences are available. However, since it’s not easy to buy media across multiple channels, the initial step had to belong to the sellers. They had to make this process as frictionless as possible for the buy-side.”

 

WHAT ARE THEY WATCHING?

If digital video content can help boost the brand experience (and the exhibitors at the DCNF will certainly argue that it does), exactly what type of content length is contributing to increased brand health?

According to VideoHub, which in the fourth quarter of 2011 analyzed 235 video campaigns across 21 verticals, content length was most important for brand health related metrics. Long-form content (in this instance, 15 to 30 minutes) on average resulted in stronger ad effectiveness, ranking in the top percentile for brand health.

“There seems to be a general trend of placing a standard commercial within longer content, and in doing so, driving value,” says Kelly McEttrick, Director/Platform Strategy, VideoHub.

That doesn’t mean short-form content doesn’t offer value. “In terms of eyeballs, with reach being a fundamental component of building a brand, that doesn’t always align with long-form content in the digital universe. The majority of frequency happens with short-form content,” says McEttrick. The number of devices on which content can be accessible adds to that. “As more and more devices are being used while people are on-the-go, that is when they’re searching for and consuming short-form content,” says McEttrick.

Assuming that the proper strategies can be determined in order to reach consumers whether they’re watching a full episode or a short, the question still remains: Are consumers accepting of video ads when trying to access content?

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A CYNOPSIS MESSAGE

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KEYNOTES ANNOUNCED FOR APRIL 24! REGISTER NOW 

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DIGITAL AD VACANCIES

Video advertising technology company FreeWheel (clients include several exhibitors at the DCNF, such as NBCUniversal, VEVO, AOL and Deca), in its 2011 Video Monetization Report, which analyzed over 45 billion video views and nearly 28 billion video ad views, discovered:

 

• Producers of professional digital video content are inserting more ads into their content: Long-form content (20+ minutes) is now averaging 6.92 video ads per piece of content; this is more than double the ad load from the beginning of 2011, when it was at 3.10 ads per piece of content.
• Consumers do not mind more ads: Even with the increased ad load by the end of the year, completion rates on mid-roll ads remained static at an average of 88% for the fourth quarter of 2011.

“Viewers now understand that there is a tradeoff. To have free access to premium content, or in other words professionally produced content that they love, they are going to need to watch more ads,” says JoAnna Abel. And it doesn’t hurt that, at worst, this creates a TV-like experience something that viewers are already used to for long-form digital video content. “The consumers are driving this shift. And so, as we have heard across our client base, content owners are actively trying to create more inventory,” says Abel.

Data from TubeMogul, which incorporates Nielsen Online Campaign Ratings into its platform, furthers this claim: Although top publishers only represent 2.4% of the sites available for real-time video ad buying, TubeMogul finds that they represent 28.7% of overall ads available for buying.

 

ARE BRANDS AND AGENCIES FOLLOWING?

A recent Forrester Research forecast, commissioned by SpotXchange, indicated that RTB in online video advertising will account for 21.8% of all online video ad spend in 2013. This would increase the dollars spent through RTB from $190 in 2011 to $667 million in 2013. In addition, data from TubMogul shows that CPMs for “top content” (as in, the comScore top 100 video publishers) is trending upward, growing at a rate of 2.57% per month.

“All of our publishers, and a lot of our advertisers, had the same questions: How big is this?” says Michael Shehan, CEO of SpotXchange, referring to RTB on video ads. “We decided to get Forrester involved to estimate the size of the marketplace, and we found out that it was larger than we thought, and that it is growing faster than we thought. This year, we anticipate that it could make up as much as half, or more.”

What does this mean? Demand from advertisers for premium, professionally produced content.

“We have seen a flood of advertisers involved on the display side approach us about wanting to get involved with video,” says Shehan. “We have received a lot of requests from premium publishers, who have no trouble directly selling their inventory, saying that buyers routinely tell them to RTB-enable their inventory. The Forrester research shows that there is a pretty sizeable market for video.”

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A CYNOPSIS MESSAGE

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WHAT SHOULD YOU LOOK FOR?

The hard answer: The exhibitors at the Digital Content NewFronts will have to convince brands and agencies that they are capable of attracting audiences to what the DCNF is about: native digital content.

It isn’t so easy. Just because content is there, it doesn’t mean people will watch. So how will the exhibitors accomplish that? Well, that’s where this gets tricky.

With this being the first “digital upfront” of its magnitude, no one knows for sure exactly everything that will be unveiled at the events.

However, that doesn’t mean brands, agencies and the other participants are going in blind. In fact, one can learn a lot by examining what the major players have done recently…

YAHOO!
Some Highlights:

 

• Electric City, an animated series produced by and starring Tom Hanks.
• Partnership with Vuguru to develop and produce multiple original scripted series distributed through Yahoo! Screen.
• Plugged In, its first reality competition series, developed in partnership with Ford to launch the Ford Focus Electric (literally brands meeting content).

Yahoo!’s strategy focuses on programming content based on what its audience loves and wants, according to Erin McPherson, VP & Head of Video. “We base (our content) on data from the millions of consumers that come to Yahoo! every day. We apply this insight to the creative process and look to develop the best scripted content.”

After this is when the brands and advertisers can come in, said McPherson. “It’s the perfect opportunity for brands to laser-target their consumers,” she said. This strategy can be witnessed in Yahoo!’s decision to roll out a collection of women’s lifestyle programs (seven original web series) without sponsorship at launch. Yahoo! financed the development and production of the shows, after which it invited potential ad partners to participate on a “share of voice” basis.  The strategy has proven to be successful, said McPherson, as the likes of Toyota, Unilever, Kraft and P&G have signed on since the launch.

HULU
Some Highlights:

• Battleground; its first scripted, original series, which debuted on Feb. 14.
• Inked a first-look international distribution deal with FremantleMedia Enterprises for any original TV series.
• Up to Speed; six-part documentary form Richard Linklater to come later this year.

Hulu already has a well-established audience that consumes serialized, television-like content, with pre-roll and mid-roll ads attached. In comScore’s February 2012 online video rankings, Hulu was second only to YouTube in terms of minutes per viewer (about 226.5). On top of that, Hulu delivered a record-high 1.5 billion video ad impressions, and was also tops in terms of highest duration of video ads (650 million minutes).

This year, Hulu has made significant strides toward original programming of its own ($500 million investment in content, with some earmarked for exclusive programming). It will be interesting to see how Hulu convinces advertisers to give its original programs a fair shake. Consumers are watching content on Hulu, but will they watch Hulu’s content?

GOOGLE/YOUTUBE
Some Highlights:

• BlackBoxTV; a sci-fi, thriller and horror channel, which launched on April 13, from CSI Creator Anthony Zuiker.
• START, a video games channel from IGN Entertainment and SHINE Group, which launched in January.

Through its original programming initiative, YouTube has chosen to invest over $100 million in exclusive content for the video site. YouTube advances partners up to $5 million to get started, and after the partners have earned it back, the site splits all future ad revenue with them.

The strategy: Have compelling creators produce interesting content, and the audience will come.

YouTube wants to create channels. Google’s SVP/YouTube & Video Salar Kamangar has previously said that linking similar content together can create higher demand and value for ads on its videos. The original programming initiative is YouTube’s first prominent stab at that concept. But similar to Hulu, will the viewers follow?

AOL
Some Highlights:

• Partnership with Mindshare Entertainment to create premium video and social branded experiences, as well as with Vuguru to produce over a dozen scripted video series.
• The Huffington Post Streaming Network; launching this summer.

For AOL, it isn’t about how brands and agencies can advertise on its content, but rather how they can partner with it, according to, Janet Balis, AOL’s Head of Sales Strategy.  Touting a content and distribution network that includes the Huffington Post, TechCrunch and Engadget, AOL will look to produce highly relevant content that take advantage of the specific audiences that these properties reach.

An example of this can be found with the upcoming Huffington Post Streaming Network, which will stream 12 hours of live programming each weekday. Balis says that AOL has structured the network to support a handful of category exclusive sponsors, who can partner and integrate content “deeply” into the live show. Considering the reach capabilities of AOL’s top brands, this seems like a winning strategy. The question remains, exactly what kind of deep integrations will be available for brands and their agencies?

DISNEY INTERACTIVE MEDIA GROUP
Some Highlights:

• Daily Shot with Ali Wentworth, a daily web series in partnership with Yahoo!
• Deal with YouTube to create co-branded video destinations, with the Disney half still to come.

For a company that aims to deliver premium family entertainment content “with heart,” partnerships such as these are significant indicators of several things. One: “We want to be everywhere our audience is,” said Dave Dickman, SVP/Digital Media Sales at Disney Interactive. “The strategy is to find Disney enthusiasts and find a way to entertain and engage that family. The broader video story is important to us. It’s critical for us to distribute and make this premium content available across all devices and platforms.”

And two, the appeal of premium content: “To put a message around premium video, wherever that is, becomes a powerful megaphone. Disney can get incredibly creative with how we link a marketing message to our characters and other assets. It’s a big impetus for marketers and us to participate in the NewFronts: the premium content,” says Dickman.

DIGITAL BROADCASTING GROUP
Some Highlights:

• Latinos Are One; a web series for the Hispanic teen audience, presented by McDonald’s.
• Programming for Diet Coke and HP that were broadcast live from Times Square.

“We’ll be highlighting some programs that we are bringing to the market that we’re really excited about, and we will be showcasing CLiP (content library platform),” says Chris Young, CEO. “We syndicate content across a wide number of partners. We have about 2,500 websites, 2,200 of whom DBG doesn’t own or operate. However, there are about 300 sites where content is being distributed through CLiP. We also program our own channels through the platform, all featuring branded and licensed programming. It is a player environment that we control. We have Editors and an Editor-in-Chief who choose what gets curated into which channel, as well as a whole staff that updates our players. We will be talking about what we can do with that.”

DBG’s strength is its experience and its “end-to-end solution” for producing, integrating and distributing digital video content. The company has been doing an upfront of its own since 2008, and has supported Digitas’ NewFront since 2009.

MICROSOFT ADVERTISING

Microsoft boasts an impressive global media network and brand/product portfolio, which includes MSN, Bing, Xbox LIVE, Windows Live, Skype and more.

On the content distribution front, Xbox LIVE is signing up a growing roster of digital video services (including those from MSOs) to bring their on-demand platforms to the console. Microsoft’s Yusuf Mehdi, CMO/Interactive Entertainment Division, has stated that households are spending an average of 84 hours a month on Xbox LIVE, over half of which is devoted to watching videos and listening to music, and not playing video games.

The company says it will have producers from brands such as MSN, MSNBC, FOX Sports, and others, discuss how Microsoft can develop content for multiple audiences, devices and screens.

NBCUNIVERSAL

NBCUniversal is the only broadcast network slated to hold its own presentation during the two-week event.

Similar to Microsoft Advertising, NBCUniversal, together with Comcast, provides an opportunity to reach and engage with connected audiences across multiple properties and platforms. The company has indicated that it will present “innovative solutions for marketers” across its digital portfolio of web, social and mobile properties for both its standalone digital networks (DailyCandy, Fandango, iVillage), as well as the TV-related digital properties (Bravo, NBC, Telemundo, USA Network, Xfinity TV and many more). One thing to look out for is NBCUniversal says about its audience targeting capabilities, as these properties can reach multiple audience segments.

ALLOY DIGITAL
Some Highlights:

• Chasing; A competition series where teams will compete in a scavenger hunt designed by Cobra Starship that will end with the winning team getting a chance to meet the band. Cobra Starship will also perform at the event.
• Style Rules; A series where two best friends compete against each other to create the perfect look for different occasions.

Alloy Digital reaches 43% of 12-34 year-old internet users, attracts more than 70 million consumers per month and is a top-10 video network, according to comScore.

But here’s why it would really behoove you to pay attention to this multiplatform media company: Alloy Digital has experience in making a piece of digital content go viral. Case in point: Dating Rules From My Future Self, a multi-sponsor digital series that achieved top ranking status on YouTube and Hulu, and was recognized by Advertising Age as a top performing viral ad campaign. A sequel will premiere this summer.

Additionally TRESemme Style Setters, which is an eight-month digital program that follows the backstage activity at Mercedes-Benz Fashion Week in Fall 2012 straight through to the Spring 2013 show, demonstrates Alloy’s capabilities in linking up brands with content.

VEVO
Some Highlights:

• Deal with Yahoo! to syndicate its video content to Yahoo! Music. Current syndication partners include AOL, Facebook and YouTube.

While known for being a distributor of music videos, VEVO has developed a way to essentially create personalized channels. “VEVO is a customer of ours, and their entire world is music videos. What they’re doing is they’re allowing users to create a playlist of videos. They are effectively stringing together content,” says JoAnna Abel from FreeWheel. A personalized channel of music videos (which other users can subscribe to) can prove to be very beneficial for those brands and agencies aiming to reach a certain type of audience.

INTERNATIONAL ACADEMY OF WEB TELEVISION

IAWTV will be hosting a luncheon on May 2 that will feature discussions about the potential impact of the Digital Content NewFronts, and the resulting increased advertising dollars, on the development and production of web TV. Michael Learmonth, Digital Editor at Advertising Age, will lead the discussion, which will also include Eli Goodman, Chief Evangelist of comScore, as well as other, yet-to-be-announced talent. Independent online networks My Damn Channel and Revision3 are among the event’s sponsors.

DIGITAS

And finally, we come to the brainchild of this large-scale event. As it also is the only agency that is presenting at the event, the Digitas NewFront may prove to be a great harbinger of the advertiser interest in the digital space. Its program includes several opportunities to network, and its invite will undoubtedly include top clients, content companies and agencies, some of whom may look to get a deal done.

Most notably, Digitas’ NewFront will include a panel called “The Digital Content NewFronts: Why & Why Now?” where a representative from each founding partner, along with a moderator, will discuss the urgency behind, and the need for, the DCNF. In other words, it’s a panel that encapsulates everything about this entire event.

 

For those who are not attending, independent online video service/network Revision3 will be powering a livestream of the Digitas NewFront, which can be accessed here.

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There is no question that digital content is here to stay. As it in most cases, the audience has already determined that. What is interesting is to see how digital companies will try and carve out a place within the media and advertising landscape. Yes, the audience is there, but it needs to be proven if and how the company will be able to effectively reach them.

“As more dollars are invested in high quality, online serial programming, we can anticipate that consumers will be increasingly attracted to the viewing experience. Everyone likes a strong story, well told,” said Colin Kinsella, CEO/North America, Digitas. Especially the advertisers.

For a complete itinerary and list of events for The Digital NewFronts, click here.

Later – Sahil
Sahil Patel, Associate Reporter for Cynopsis Digital
04.16.12

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