Internet Video Giants Target Ad Dollars With 'Newfronts'
CNBC Media and Entertainment Reporter
Internet giants want to steal some of the $60 billion dollars marketers spent on TV advertising last year—digital video drew just $2 billion in spending—so they’re taking a page from the networks, and they’re playing by Madison Avenue’s rules.
Ahead of the traditional TV “Upfronts,” the networks’ presentation of new shows to advertisers, digital media companies like Hulu,YouTube ,Yahoo and MSN , are putting together their own version, called “Digital Video Newfronts.”
The goal: showcase both original content and all the advantages of online ads—like the fact that they can be narrowly targeted and measured.
Hulu kicks off the NewFronts with a presentation to 500 advertisers—showcasing its licensed content from 350 partners, plus new exclusive shows.
Perhaps most important, Hulu, which is co-owned by Disney , News Corp and NBC Universal , will explain why Hulu’s ad format has distinct advantages over broadcast TV.
Earlier this week Hulu just announced it’ll only charge advertisers if viewers watch a commercial in its entirety, not charging if they stop half-way through.
Hulu’s SVP of Advertising Jean-Paul Colaco tells me that Hulu hopes that by appealing to marketers while they’re planning their full year of spending, they’ll convince marketers to devote a “significant portion of their overall marketing budget … to online video.”
What’s the appeal? In addition to narrow targeting and measurability, Hulu allows users to swap out of ads they find boring, so the ads they do see are far more relevant, and therefore, effective.
Colaco says that the return on investment is higher for advertisers, because Hulu simply eliminates wasted ad spending. Hulu generated $420 million in revenue in 2011, up from $260 million in 2010—we’ll see how much faster Hulu grows this year.
YouTube, Microsoft, AOL , Publicis, along with NBC Universal and Disney Interactive, will all host presentations before May 2nd, ahead of the start of the TV Upfronts.
Most of these companies have presented their lineup to Madison Avenue in years past. But this is the first time they’ve organized the presentations and stacked them so they so clearly take aim at TV ad dollars.
Madison Avenue is stuck in a pretty set system—planning much of its spending a year in advance—we’ll see if they loosen the purse strings when the Internet Video guys work within their structure.
(Comcast is the majority owner of NBCUniversal which is the parent company of CNBC)
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