wtf: programmatic tv

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WTF Upfronts/NewFronts

Table of contents

01 Introduction

02 The Upfronts: A brief history

06 The NewFronts: A briefer history

11 The Future

08 The NewFronts 2016

03 The Upfronts 2016

WTF Upfronts/NewFronts 01

Digital media types tend to suffer a kind of myopia: Programmatic ad serving, audience targeting and RTB are our lingua franca, but across the aisle in TV land, direct buying is still king. And the king’s court is the television Upfront.

That’s right, for three solid months in every city in the United States, the biggest global advertisers converge on this programming showcase to negotiate and pledge dollar figures so staggering that digital media just had to shave off a sliver.

And lo, the Digital Content NewFronts were born.

So if the Upfronts are for TV and the NewFronts are for digital, why do we need this guide? Because new technologies like programmatic advertising and OTT, demanded by digital natives, are forcing the linear TV big shots to go digital. And TV’s glamour and revenue is luring digital media producers to television.

Keep reading and we’ll unpack which is which, who is where and whether the divide between these two events should eventually disappear.

Introduction


“Up front” buying—the purchase of commercial air-time based on the promise of upcoming TV programming—has existed almost as long as television itself. Networks offered advertisers an advanced look at programming as early as the late 1940s, when Howdy Doody, The Texaco Star Theater and the Indian Head Test Pattern were all top-tier entertainments.

But “the Upfronts” as we know it weren’t born until 1962, when the American Broadcasting Company shifted from a year-round premiere schedule to a single, fall debut season, and offered advertisers an early look via a spring showcase. NBC and CBS followed the next year, and suddenly buyers found themselves all jockeying at once for a limited amount of commercial airtime.

This Mad Men-era sellers’ market shifted only slightly in 1967, when ABC again redefined the market by offering the first-ever ratings guarantees. Advertisers could now bank on a concrete promise of viewership with prices set accordingly and, for the first time, they could angle for a bargain by placing their bets on sleeper hits. Still, supply remained relatively scarce.

That all changed in the early 80s, when the broadcast networks found themselves shoulder to shoulder with young cable upstarts offering ever more diversified inventory and more targeted audiences. Stay at home moms, yuppies, even kids took on greater currency as the swelling ranks of cable networks clammered for advertising dollars and the big three kvetched about their “fracturing” audience.

Sound familiar? It should. There are so many broadcast, cable and now non-linear providers that the Upfronts of 2016 span three months and are hosted in every major US city. To get a leg up on linear and digital competitors, networks aim to bow buyers over with star power, trotting out their marquis players.

Last year, FOX brought in Will Forte, Kristen Schaal and January Jones to debut their comedy, Last Man On Earth. Meanwhile, E! had the ubiquitous Kardashians walk the stage to usher in a new season and introduce their growing suite of reality spin-offs. All this to support the direct buying relationships that still supply the most TV revenue.

The Upfronts: A brief history


The Upfronts 2016 Schedule

Date Network Location Time

March 2 Nickelodeon New York Afternoon

March 3 Nick@Nite/TVLand/CMT New York Afternoon

March 7–9 Disney Media Orlando Afternoon/Evening

March 8 Games Show Network New York Morning

March 15 Scripps Networks Atlanta Afternoon/Evening

March 15 National Geographic New York Morning

March 22 Scripps Networks Detroit Afternoon/Evening

March 29 Scripps Networks New York Full Day

March 30 Azteca America Los Angeles Morning

March 31 Discovery Comms. New York Morning

March 31 Comedy Central New York Afternoon/Evening

April 5 Azteca America Chicago Morning

April 6 Scripps Networks Los Angeles Afternoon/Evening

April 6 Fox Sports Media New York Evening

April 7 Simulmedia New York Afternoon

April 7 Freeform New York Evening

April 11 Bravo/E!/Oxygen New York Afternoon

April 12 Cadent Media New York Morning

April12 Azteca America New York Afternoon

April 13 Scripps Chicago Afternoon/Evening

April 18 BET Network Chicago Afternoon/Evening

April 19 Scripps Networks Minneapolis Afternoon/Evening

April 20 Crackle New York Morning

April 20 BET Network New York Evening

April 21 Azteca America Dallas

April 21 MTV New York Evening

April 26 LATV New York Evening

April 27Outdoor/Sportsman/World

FishingNew York Evening

May 2 - May 13Digital Content NewFronts

May 16 NBC New York Morning

May 16 FOX New York Afternoon

May 17 ESPN New York Morning

May 17 Univision New York Late Morning

May 17 ABC New York Afternoon

May 18 Turner New York Morning

May 18 NCM New York Afternoon

May 18 Mundo Max New York Afternoon

May 18 CBS New York Afternoon

May 19 The CW New York Morning

May 19 NBCUniversal New York Afternoon

Date Network Location Time

®

10 Reasons toBelieve in

Programmatic TV.

T R U E P R O G R A M M A T I C T V

W W W . A U D I E N C E X P R E S S . C O M

Target Audiences, Not Sitcoms1Programmatic TV technology allows you to target your campaigns based

on advanced data and audience profiles, way smarter than just age and

gender.

Automation, Automation, Automation

6

We are truly automated through and through, from data implementation

to targeting to planning & buying to delivery, and even next-day reporting,

we don’t take the word “automation” lightly.

TV is Better Than Ever in the Digital Age

2

Pure programmatic combines the reach and scale of TV with the targeting

of digital marketing. Scale and smarts on one screen – you’re totally

geeking out right now, aren’t you?

It Delivers with the Lights On7Impressions are always 100% guaranteed on all campaigns. You get

exactly what you’re promised and are never left in the dark.

It’s Totally Transparent3Your full-view metrics and insights are available on-demand so you know

everything about how your campaign is running and can instantly adapt,

rather than spending resources on pesky guessing games.

Surpass Client Expectations8Flexibility is key and there are no surprises as your campaign airs.

Something your clients will be happy about.

The “Plumbing” is Now in Place4We spent a decade developing a cool Gateway server that hardwires into

TV providers, creating the channel (see what we did there?) for digital

technology in TV.

A Fast Pass to the Finish Line9You can build a campaign in two minutes and get it on air within 48

hours. Sometimes it’s better to be the hare than the tortoise.

It Plays Nice in the Sandbox5The tech wires into the existing TV infrastructure to give you flexibility and

speed – we made the investment so you don’t have to.

We’re Doing it Differently, but We’re Still Doing it

10

With the amount of viewer fragmentation, it’s a relief to know that

television is still television. At the end of the day, it reigns supreme & is

smarter than ever.

http://info.audiencexpress.com/see-how-it-works-0-0?utm_campaign=Digiday%20Whitepaper&utm_source=Digiday


This year’s Upfronts will be the largest yet, with agency focused presentations beginning in early March and spanning April and May. While the Upfronts remain a festival of direct buying, this year’s event will be colored by the rise of programmatic TV.

Both NBC Universal and FOX this year announced plans to offer some of its inventory on programmatic channels in February, ahead of this year’s upfronts. The move is a sign of a major shift for linear broadcasters who, to date, have only dabbled in programmatic. The International Data Corporation, which analyzes the Telecom industry, estimates that less than $1 billion of television inventory is available programmatically, a drop in the $70 billion broadcast bucket.

Programmatic has caught on with digital publishers partly because it automates a process that once relied on human relationships and intuition, ironically the very bedrock of the Upfronts themselves. More importantly, programmatic also allows digital publishers to capitalize on something they have in spades: data.

Crafting audience segments in digital is relatively easy, given the mountains of data publishers have on hand. Linear broadcasters would love to tap into the same efficiency, but the data capabilities of broadcasters aren’t yet on par with those of digital. As data collection technology evolves, programmatic is likely to claim a larger share of linear inventory.

Meanwhile, linear broadcasters are working to colonize the digital space, taking their content over-the-top onto owned and operated platforms. As more users adopts they platforms, the lines between digital and linear blur. Programmatic has gained some traction with broadcasters on both sides of the equation with its promise of efficiency, leading some to speculate that it might soon snatch the crown from direct buying.

“It’s interesting to see programmatic folded into the Upfronts,” said John Sullivan, vp of platforms and strategy at NBCUniversal. “They’re testing the waters for something that could ultimately make the Upfronts obsolete.”

The Upfronts 2016


The Upfronts 2016All that said, two major broadcasters announcing that they’ll dabble in programmatic sales isn’t quite a terminal diagnosis for the Upfronts. Though it opens the door to change, the industry is still driven by direct sales with an estimated $8.94 billion being exchanged at last year’s event. Neither NBC or Fox has specified the amount of inventory being offered programmatically, but they also haven’t scaled back their participation in the Upfronts.

Beyond programmatic, the 2016 Upfronts will reflect another digital change. Time shifting audiences have moved away from en masse viewing of regular prime time shows. Hence, advertisers are hankering for premium—read “live”—programming. (Which beloved musical will NBC skewer this year? Who cares! It’s ratings gold).

Experts predict that television advertising rates,which have been gradually declining for over a decade, may

rise as networks respond to this demand for premium content. Ajay Jain, senior analyst at Pivotal Research Group, said he expects networks to seek a 5 to 10 percent increase over last year for premium inventory.

Interestingly, Hulu—the love child of broadcast giants ABC, Fox and NBCUniversal and a prime enabler of time shifting audiences—will present at the NewFronts. But, other digital providers are infiltrating the Upfront lineup.

Among the pioneers crossing over are Sony-owned streaming platform Crackle, which debuted at the Upfronts last year. This year, NBCUniversal follows with its own digital platforms, including newly launched digital comedy channel SeeSo. CBS will also offer inventory from its subscription platform, CBS Now.

As digital entertainment becomes more prominent consumers’ lives and advertisers’ budgets, the line between the Upfronts and NewFronts are growing hazy.


It’s telling that even after eight years of NewFronts, many in the industry still ask themselves, “Wait, the NewFronts are a thing?” Indeed, linear-native media buyer, they are. Starting in May, no fewer than 37 digital media companies will be pitching advertisers with their latest multi-platform programming.

While Upfronts buyers haggle over the exact price of universally valued inventory, NewFronts participants are still trying to prove their value. Nine years on, the event is only partly about haggling over price points. Mostly, sellers are still trying to convince advertisers that their content is on par with television.

That’s roughly what DigitasLBi had in mind when it launched the first digital content NewFronts back in 2008: Potential. Taking a page from broadcast television, the digital agency conceived the conference as an opportunity for digital producers to pitch their slates and sell advertisers on digital content. In borrowing from the Upfronts’ format,

digital would gain the veneer of legitimacy that would lead to bigger paydays.

The gambit seems to have worked, at least in part. In 2016, the NewFronts—now run by the IAB—are no longer just a bid for attention. The annual event has become a valuable stage for the digital media industry to present itself to the world. The industry hasn’t reached parity with television prices yet, but advertisers are increasing their spend year-over year and attendance continues to grow.

Of course the players have changed considerably. The 2008 edition of the conference featured headliners included Michael Eisner’s fledgling digital studio Vuguru, the temporarily resurgent MySpace, and Next New Networks (since acquired by video giant YouTube.) Those sellers are all but forgotten today, replaced by the digital native creators and old guard entries represented on the next page.

The NewFronts: A briefer history


Session 9-11am 12-2pm 3-5pm 6-8pm

March 2 New York Times Buzzfeed Bloomberg Refinery29

March 3 Maker Mode Conde AOL

March 4 Hulu Popsugar Yahoo Hearst

March 5 Time Inc. CNN DigitasLBI YouTube

March 6 Machinima Time Warner Vice Woven

March 9 NatGeo Fullscreen SheKnows Defy

March 10 Studio71 StyleHaul HealthiNation

March 11 Whistle Sports IAB NewFronts Insights Luncheon AwesomenessTV

March 12 Activision/Blizzard WebMD DailyMail/Elite Daily NowThis

March 13 Trusted Media Playboy Mashable

The NewFronts 2016 Schedule


Only at the NewFronts is YouTube a grey lady and The Grey Lady a new comer. This year’s biggest presentations are more likely to come from digital ingenues such as Time Inc., Hearst, and The New York Times and new media darlings like Buzzfeed, Refinery29, and Popsugar. The growing power of video to drive traffic, particularly the advent of Facebook’s fast growing video product, has pushed more traditional and digital publishers toward making splashy original video debuts.

Vice has pivoted to TV with the launch of its Viceland cable channel. Buzzfeed has likewise turned to television, tapping its growing video division, Buzzfeed Motion Pictures, to create branded content for NBCUnviersal’s cable outlets. Both, however, will present at the NewFronts.

“Everyone has their eye on TV,” said Stephanie Horbaczewski President and CEO of fashion and beauty focused digital network StyleHaul. “That’s where the money is. We can build a bigger audience but the payouts in linear are still bigger.”

Despite its pedigree, popular mass market OTT platform Hulu will once again preview its upcoming slate at the NewFronts. In a world where linear and digital are increasingly bleeding together it seems that the ability to sell by day-part might be one of the last points of differentiation.

YouTube, and the cottage industry of digital studios and multi-channel networks tit cultivated, will also be a presence at this year’s NewFronts. However players like Fullscreen, Maker Studios, Machinima and StyleHaul, who once attended the NewFronts to introduce advertisers to their new breeds of digital content and viral stars, are now the old guard.

Recent years have seen consolidation within the MCN space with players like Maker and Fullscreen being absorbed into major media conglomerates (The Walt Disney Company and AT&T/Chernin Group co-venture Otter Media respectively) The term multi-channel network, once a buzzy designation, has become a dirty word with most former MCNs rebranding as “multi-platform media companies” to avoid being tainted with the stigma of the YouTube dependent business model.

Finally, Yahoo, which was a founding member of the NewFronts back in 2008, will still be presenting this year despite the high profile shuttering of its video division late last year. The company infamously took a $47 million writedown on its video business after an an investment in television style content failed to pay off. Aside from pitching advertisers on remaining inventory, it’s unclear what the struggling web giant will be presenting when it takes the stage in May.

The NewFronts 2016

Who will be there


The NewFronts 2016

Who won’t be there

Even as the ranks of the NewFronts have continued to swell, a handful of players have soured on the event. Founding partner Microsoft dropped the NewFronts in 2015 after shuttering its Xbox Entertainment Studios and halting its original content efforts. Crackle, the Sony owned streaming platform that’s home to Emmy winning programming like Jerry Seinfeld’s “Comedians In Cars Getting Coffee,” ditched in 2015, heading for the greener pastures at the Upfronts.

As online video evolves more departures are possible. Yahoo, another founding partner of the event, ditched its expensive and widely unsuccessful original video programming efforts late last year but will still present at the 2016 Upfronts. Meanwhile, Hulu could easily pull a Crackle and jump the fence to the Upfronts. The streamer has a growing roster of original TV quality content and a broadcast pedigree as a joint venture between ABC, Fox and NBCUniversal.


So what does the future hold for the vaunted Upfronts? While programmatic is bound to make some waves this year, it’s unlikely to overturn the boat entirely. Direct buying is still firmly at the helm. However, as more broadcasters and producers move to digital distribution, the distinction between the Upfronts and NewFronts is likely to erode further.

Why? Consumers don’t care about the linear/digital divide. Whether they’re hefting a half-pound Time Warner issue remote control or digging through their couch cushions for that oh-so-slim Apple TV model, they only care about what they’re watching. And advertisers follow eyeballs.

(The two events already wrap around each other: The Upfronts taking a two-week break while the NewFronts roll through New York, a tacit acknowledgement that the same buyers attend both events.)

Broadcasters are already going Over The Top to meet consumers where they live, trading in carriage fees for digital ad dollars. Digital publishers too are making the switch, launching OTT apps—a big switch from YouTube distribution—as a showcase for the digital video that also pulls in that coveted mobile audience.

If consumers, advertisers and broadcasters all converge, it follows logically that the markets will too. Except that inertia is powerful. Inventory from CBS’s OTT platform CBS Now might find a natural home at the NewFronts, alongside NBC Universal’s SeeSo platform. But both are sticking with the glamour (and higher CPMs) of the Upfronts.

But a combined Upfront/NewFront future isn’t out the question.

Said Brian Selander, evp of Whistle Sports: “It’s more and more the same world.”

The Future

wtf: programmatic tv

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