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paidContent - Sluggish TV Upfront Doesn't Benefit Online

This story was written by David Kaplan.
The TV upfront negotiations between agencies and networks appears to be moving forward after a period of paralysis, but you can dismiss any thought of online video benefiting from the recent impasse or from the sudden spurt of deal-making. For one thing, sources say, the current system, whether spending is up or down, still tends to view online video as an after-thought or an experiment. And when budgets are tight, experiments are the last thing to be funded.

In particular, cross-platform deals are expected to remain more sidelined than in previous years. Total dollars are down, says Carrie Drinkwater, director of national broadcast for Havas media buyer MPG, and TV/online ad tie-ups aren’t attractive enough to get advertisers to up their spending. “While the slowness of this year’s upfront process gives advertisers and networks gives the parties involved more time to create something above and beyond the traditional banner ad, it’s simply not viewed as crucial,” Drinkwater told paidContent.

“Even though there is not going to be as big a push in terms of spending, I think there will be more creativity. I would expect more branded integration deals on TV and that will certainly be extended to online, as well as the use of sweepstakes and similar promotions. But these deals will not be raising the needle in an perceptive way.”

Bottleneck: Web video is still one of the stronger advertising categories when it comes to spending growth. Some may have thought that the indifference to striking a TV deal could lead to more consideration for online video but that doesn’t seem to be the case. In fact, the bottleneck in TV deals the past few weeks only highlighted the real impediments the space has in terms of doing bigger deals. Even though average CPMs for online videos tend to be lower than what’s offered in primetime, agencies and advertisers are still reluctant to take a chance and invest more of their budgets in digital, said Jordan Levin, the former WB CEO who went on to co-found the multi-platform video production and talent management firm Generate. While Generate’s broadband series The Lake debuts on next month with the backing of what Levin calls a “major sponsor” he says he has agreed not to identify, such deals are not being tied to the upfront season. Levin: “More money should be moving to digital, given that audiences are shifting. But theres so much legacy investment, coupled with fear and uncertainty, there’s a greater emphasis in the industry in talking up the effectiveness of TV versus online video.”

No upfront for online video: One thing online video doesn’t have going for it is an organizational structure to promote sales—like an upfront market. Every once in a while, someone floats the idea for a marketplace around online advertising, especially for video, which in the minds of many traditional ad industry professionals feels more familiar. Despite individual attempts like Microsoft’s upfront-like presentations for its online programming, Levin doubts that a comparable system can be established for the web. “The upfront was always an artificial marketplace intended to force buying during a specific period of time. Because marketers were more engaged in reach and frequency strategy, as opposed to an efficiency strategy that’s associated with the web, the idea that there are ‘must-buys’ is becoming less and less relevant. Theres no brand marketer screming at their buyer that they’re going to be shut out.” In general, there are a nearly infinite set of options for advertisers right now. Therefore, the worry of not getting your message out doesnt exist, and that will continue to degrade the value of an upfront—for both TV and online.

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By David Kaplan
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