NEWS: Upfronts 2008: Will Anyone Buy Online Ads?

Upfronts 2008: Will Anyone Buy Online Ads?

Michael Learmonth | May 6, 2008 8:03 AM

The network TV upfronts -- the weeks-long sales cycle where the broadcasters try to sell 80% of their inventory for the next year, for some $9 billion -- begin next week. Online ads are often sold as part of upfront TV packages, but in the past they've been a rounding error in the procedings. But this year there is plenty more TV online than last year (Hulu et al), so does this mean more digital ad dollars in the upfront?

Three takes out of the Interactive Advertising Bureau's digital video conference in New York:

Yes, advertisers will be buying more online with their TV this spring. CBS interactive chief marketing officer Patrick Keane argues that advertisers will increasingly want to couple broadcast buys with online buys for the same shows: He says out that 90% of advertisers in CBS' March Madness basketball tourney bought both on TV and online.

Maybe, but more big ad categories would have to increase their digital spending. Deep Focus CEO Ian Schafer argued that for online to win a bigger share of the pie, more advertisers -- specifically, packaged goods brands -- need to come into the market. When they do come in, they tend to want to develop branded content, which isn't typically sold in the Upfront.

No, because online video has gotten too expensive. An exec in the audience from Atlas, Microsoft's ad serving system, said he's seeing advertisers opt out of professional online video because the ad rates -- in many cases higher than network TV --  are too high. He said advertisers are balking at CPMs in the "high $20s" (the cost to reach 1,000 people). Broadcast ad rates are generally in the low $20s per thousand.

Online Video Ads: High Price, High Value?

from ClickZ News Blog

How long will online video ads, on a CPM basis, cost more than television ads?
"It's driven by a dearth of quality produced video online," said Nick Johnson, NBC's VP, national sales, Internet and broadband.

"It's a marketplace supply and demand story," said Johnson, speaking at the IAB's Digital Video conference today in NYC. He said the costs will likely remain higher, for now, as long as consumers respond better to online video ads than television ads. "There's a lot of opportunities to be interactive, to be a very immersive experience," he said.

From Endemol USA, the producers of reality television series such as "Big Brother," look for brand-sponsored content online, said Jon Vlassopulos, SVP, digital media and branded entertainment. (Last month, NBC Universal said it is working with Omnicom Media Group Digital to pair brands with content.)

Two years ago, Endemol Mobile created an interactive mobile video for Nokia, called "Get Close To…Sugababes." It featured clips of the pop group. And the video was shot on -- you guessed it -- Nokia phones.

IAB Launches Video Ad Compliance Seal

from ClickZ News Blog

In conjunction with finalizing its Digital Video In-Stream Ad Format Guidelines, the Interactive Advertising Bureau has unveiled a compliance program à la TRUSTe. The new guidelines were proposed a month ago, and nothing in those original guidelines has changed following a comment period.

According to the IAB press release, "The IAB suggests that compliant member sites post the compliance seal in their online media kit as well as in their print versions. Media buyers will be educated about the benefits of Digital Video Ad Format Guidelines and be encouraged to look for the seal."

Yahoo: We're Selling 50% Of Our Video Inventory In Advance (YHOO)

Michael Learmonth | May 6, 2008 10:07 AM

They might be distracted, but Yahoo's video sales team is open for business. Rebecca Paoletti, director of video strategy, says sales are brisk. It's the third year that Yahoo (YHOO) has held video sales talks with advertisers in parallel with TV's "upfront" sales season.

Meetings with advertisers started this week, and Paoletti said judging from their plans, she expects to sell 50% of all of Yahoo's video ad inventory in advance this spring, up from 30% last year.

Paoletti's pitch to advertisers: Buy now or take your chances. Yahoo and other portals sold out of video ad inventory last year, (CBS and Hulu have also made this claim), so buying during upfronts should guarantee you the eyeballs you want.

That scarcity doesn't mean that online video revenue is skyrocketing. In part it means that there aren't that many viewers watching ad-supported video (YouTube doesn't count, because Google doesn't really sell ads for its dog-on-skateboard stuff). And in part it means that advertisers aren't loading up video with ads, becuase they're afraid the ads will drive viewers away.

Yahoo says it is getting ad rates for online video that compare favorably to TV: $25 CPM, on average, or higher for targeted ads. We've heard the same from other publishers, as well as some complaining from advertisers that online video has gotten too expensive.

What's Yahoo selling in the upfront? Video in its vertical sites: music, news, sports, health, entertainment, OMG, movies, TV, finance, and tech, as well as inventory on partner sites, such as Comcast, Forbes, MobiTV, MLB and CNET. Yahoo is also seling its' own 10 original online shows, including "Yahoo Sports Minute," "Good Morning Yahoo," Primetime in No Time," and "TechTicker" (which features our own editor Henry Blodget as a host!)

Paoletti won't say what percentage of Yahoo's ad revenue comes from video except that it is the smallest but fastest growing ad segment.