Last year, iSPOT published an Upfront Roundtable, where four industry executives spoke about the digital opportunities that were available. A year later, there’s more to offer with a wealth of new content being played by broadcast and cable networks on a host of platforms, from their own sites to new ones like Hulu. If 2007 was the first year for a digital upfront, 2008 is the year when the digital upfront was solidified. Networks included detailed information about their digital offerings during their upfront presentations that were held last week. Today, executives from ESPN and a range of media buying firms discuss the offerings with iSPOT.
Mitch Oscar, executive VP, Carat Digital
iSPOT: What kind of digital opportunity was provided in this year’s upfront?
Oscar: Over the last couple of years, the linear broadcast and cable networks have been extending into digital platforms. They have video on demand, they all have a broadband site, they’re trying wireless experiments. When they come to agencies and say we can extend messaging through all these new platforms, the agencies have an easier way of learning how to market with the new media. It makes it a one-stop shop as opposed to agencies having to go to so many different places to purchase media, and it’s brands we trust.
iSPOT: Some networks are developing broadband only programing.
Oscar: There is limited broadband inventory so it’s one thing to migrate their programs that have already aired on TV onto their sites, and the popularity of the brands exists so they’re creating original programs to be even stickier to consumers. I go to abc.com to see an episode of Grey’s Anatomy I missed but while I’m there I see some new content. By sampling it if I like it, I’ll come back, so they’re creating more inventory for themselves so there will be more advertising and marketing possibilities. And it’s less expensive to create a short fast piece for a broadband site them it is to create an hour drama. It’s two to three million dollars for a drama compared to $2,300 for an episode of Prom Queen.
iSPOT: Can you mention any specific networks that are strongest in the digital space?
Oscar: ABC with its player is having a wonderful experience, it’s like you’re watching the movies. ESPN for sports fanatics. Hulu has gotten a lot of attention because the experience is so Facebook like, crisp, white and clean. The question is can they maintain consumer interest given the limitation of programming? CBS allows its network content to play across multiple sites although 95 percent of their audience seems to be at cbs.com so we don’t know if that experiment works. There are issues about does viewing TV programs that run on the web add to the audience or detract from it when it runs on linear TV. CBS in their upfront was talking about why can’t we add what CSI does on linear TV to what it does on iTunes and cbs.com. It adds to the audience numbers but we don’t know about duplication. We’re trying to figure out how much is something worth.
iSPOT: Do all those issues impact the price of advertising during the upfront?
Oscar: Yes, they impact the price of linear and digital because the networks try to sell cross platform. For people who do more business with them, they will probably have some price breaks.
Bill Cella, chairman/CEO, Cella Group
iSPOT: How much digital advertising will be offered in the upfront?
Cella: These companies have made a lot of acquisitions in the digital space which I think is a good thing. The digital money is out there; the reality is there’s a lot of digital websites. You need a strong brand that is recognizable for buyers to connect an online space with a traditional buy. If an advertiser wants to come in and buy a program, they should connect with the website they have now. When the networks are creating new digital content that’s really housed on their digital space exclusively, that’s a different type of environment. They’re all looking for digital money to help monetize the purchases.
iSPOT: Networks are playing content on their own sites and other sites like Hulu and Joost. How is that included in the upfront?
Cella: What these companies are doing is they’re aggregating audiences demographically. If you have the Hulu site that’s got a show that’s on NBC targeted to 18-34, that’s an audience you want to go to. It’s a little different from what the network has on air. They’re trying to accumulate audiences to better sell to buyers.
iSPOT: How much demand is there from advertisers to buy digital as well as linear?
Cella: There’s still more of a demand for linear but advertisers want to experiment with digital. In all honesty when you do a robust campaign with digital, you can’t do it quickly. It takes awhile to strategize; it has a gestation period of about 13 months. So to do rich media digital along with your traditional experience, it should have been thought about since last November–but you can do quick hits which is probably going to happen more than deep ingrained branding at this time.
iSPOT: What categories of advertiser are most inclined to buy digital?
Cella: A lot of consumer brands like Unilever are very aggressive in the online space and they’re doing good things. It’s driven by the client.
Sloan Broderick, managing director, Beyond Interaction
iSPOT: How much digital inventory are the networks offering this year?
Broderick: I wouldn’t have any concrete numbers I can throw at you, but having gone through a number of the upfront presentations, they’re active in digital which extends to digital out of home and other channels that are now being fueled by digital assets. Their goal is to sell as much as possible; anywhere they can capture more advertising dollars and create a more wholistic solution for any of the advertisers is a win for them.
iSPOT: Is it up from last year?
Broderick: I would guess yes, it’s a pretty safe conclusion.
iSPOT: Is the reason for that because there’s so much more online TV viewing, not just on the network websites but on other sites such as Hulu and Joost. What role does that play in the amount of digital they’re offering?
Broderick: For a number of our clients we are considering how the new sites play into our overall buys. There’s a couple of unique angles in digital planning that we haven’t solved yet and will make for an interesting conversation abut how much to buy. In a lot of ways buying a lot of digital inventory up front may or may not be good for a brand mostly because of targeting and optimization that can happen in a lot of ways where the promise of bulk buying value up front is great. There’s probably a lot of other tactics that we can apply including behavioral targeting and other things that would make the media work harder for our clients and doesn’t need to happen in the upfront. There’s a unique angle if we talk about more integrated placements and some branded entertainment things with a lot of the networks–that may be where we start to discuss more premium placements and development cycles with their development and production teams. All those things will start to unfold over the next couple of weeks.
iSPOT: Regarding the other sites, do networks sell inventory for them or do you buy it directly from them or does it work both ways?
Broderick: I believe it works both ways. From a network perspective if it’s going to be incremental for an upfront buy, I’m sure they’d figure out the best ways to include those properties.
iSPOT: Networks play full length shows and shorter clips, Do you know how different kinds of inventory are sold during the upfront?
Broderick: I think it will be driven by the client agendas where our brands are figuring out what types of assets work best for them, whether it be five second pre-rolls or full 30 or 60 second spots that get run online. That will be a strategic decision made jointly between our agency and our clients to maximize their opportunities.
iSPOT: Do networks sell specific video ad formats during the upfront or do you decide after you make the buy?
Broderick: All those types of decisions will come out during the negotiations. There’s no hard fast rules.
iSPOT: Has there been any talk about mobile video ads in the upfront?
Broderick: I haven’t heard it come up, but if we have a customer that needs it, it would be part of our conversation. I believe some networks have mobile capabilities or partnerships in place where they represent mobile advertising opportunities. It’s possible, it will vary by network.
Tracey Scheppach, VP/Video Innovation Director, Starcom USA
iSPOT: Is the amount of digital advertising being sold during this year’s upfront higher than last year?
Scheppach: Yes, one thing that is important to keep in mind is as media consumption changes, our plans change. We look at media plans the way people look at media; there’s no way you can argue that media habits aren’t changing–just look at full episodes streaming over the past two years. It went from not a single impression to a very high number, you should get the networks to comment on how many full episodes are being viewed on line. Clearly more money is going to move there.
iSPOT: Is it true of cable as well as broadcast networks?
Scheppach: Broadcast has a unique advantage because they’re not contractually obligated, their content is a little more free. On television there’s the must carry rule, broadcasters don’t have contractual obligation to companies like Comcast while cable networks do. When Comcast pays ESPN $3 a subscriber, there are restrictions on distribution where Comcast doesn’t pay ABC so what you see is a faster distribution or syndication of content that is owned by the networks. We’re seeing it start to loosen up this year on the cable side, they too are saying they’ll stream full episodes the day after, but the content has more restrictions on it currently so that’s why it hasn’t happened.
iSPOT: When networks sell digital do they do it in package deals with the linear content or separately?
Scheppach: It varies but we’ve seen a lot of those. We talked about it two years ago calling TV upfront a video upfront. We’re seeing more evidence of that now when TV folks are bringing their opportunities, they include an online extension packaged into the deals, which doesn’t mean you can’t buy online specifically.
iSPOT: Their goal is to sell whatever they can sell.
Scheppach: Exactly.
iSPOT: What kind of advertisers are more inclined to buy digital?
Scheppach: I honestly think there is something here for everybody. Across the depth of my client base it might have been larger clients more active in the past but now we’re getting to the place were there’s something for everyone.
iSPOT: You can buy full length shows and clips, is there a variety of inventory they’re offering?
Scheppach: There’s a variety of things you can buy across hundreds of sites; some of the best advertising we see out there is the full episode streaming. It demanded tremendous research to prove that the product was valuable.
iSPOT: Did they present the research during the upfronts?
Scheppach: Nope. I was one of the first to put ads up on full episode streaming and they’ve been providing research since the day we started so for the last two years I’ve run dozens of campaigns all supported by research which gives online a competitive advantage because it’s so accountable and they’re proving their results.
Eric Johnson, executive VP, multi-media sales, ESPN
iSPOT: What kind of digital content is ESPN offering during the upfront?
Johnson: We think digital video in the upfront is a big play this year. We’re going to have short and long programs, day time is our prime time and the TV network is our portal. Live sports is the place of espn360.com. We’ve bucketed our programs that we’re offering to advertisers. We have game coverage news and analysis, highlights and recaps talking about news coverage. We have the opportunity to sell those to advertisers on a sport-by-sport basis dynamically ad served and make sure they’re a part of wherever it’s served across the website. We have studio show extensions where we take a show that exists on TV and do an original version for the website. They are sponsorable or available on a rotational basis. We’re going to have specific digital media studio shows that don’t exist on the linear networks, short two to three minute digital studio shows. The most exciting is digital media originals, entertainment fare that goes to espn.com instead of the linear networks. It’s a type of show that isn’t ready to go the linear network but has fan interest. The shows will be about 10 minutes long and we’re looking to make them episodic and post them at a particular time so they become appointment viewing. Kenny Mayne, our sports anchor, signed up to do an episodic show that takes an eccentric look at sports and lifestyle around sports.
iSPOT: When you sell advertising for this digital content, do you sell it primarily to existing TV advertisers or new digital advertisers or both?
Johnson: We’ll make it available for both. What makes it interesting this year is a lot of the digital programs are extensions of linear programs so the idea of promoting them at the upfront is valuable to TV advertisers who will lock them up because we created a way to have unique sponsorships and there’s not going to be a lot of clutter. They get the opportunity to billboard. Our goal is to go in and sell half our digital video assets in the upfront.
iSPOT: Selling digital content during the upfront isn’t brand new but it’s relatively new.
Johnson: For us it’s a breakthough year because of the technological capability, we have the ability to dynamically ad serve this year which we hadn’t had before. The ability to provide more sponsorship value with overlays and the opportunity to allow advertisers to buy sport by sport. The number of ways to sell it is different so it creates a lot more opportunities which is the reason why advertisers during the upfront will lock that in now and make sure they’re not shut out of it later.
iSPOT: Are there any kind of mobile applications?
Johnson: Yes, for mobile advertisers we do have some extensions. It’s small compared with broadband but we’re developing programs that use the mobile device for the fans who are connecting with the set. We’ve revamped what our ad serving capabilities are in the mobile environment. This will be the year.
iSPOT: Will mobile video ads play as opposed to static ads?
Johnson: Static ads are this year’s bread and butter but there will be the capability to do mobile video ads.
