2014/2015 Upfront in Hindsight: Advertisers Are Ready for TV and Digital Convergence, Real Change to Happen Next Year

With most of the negotiations and deals from this year’s “frontal” season behind us, there are a few interesting observations on how advertisers and markets are making their video and cross-screen investments. 

In short: large-scale, holistic upfront planning of big TV-centric budgets across both television and digital video is not going to happen this year– at least not in an industry-wide manner. While a few of the biggest online video players may see a portion of Upfront dollars, the allocation of brand advertisers’ dollars across television, online and mobile devices with the goal of optimizing for a given bottom line result will have to wait a little longer.

In terms of mindset, however, this TV Upfront and digital NewFront season we’ve turned the corner.  This year, the industry has hit a psychological inflection point, and next year we’ll see the execution.

Why the disconnect? Everyone understands the need to begin incorporating video into their marketing and advertising plans. It’s about following great television content as it migrates across devices, and tapping into the growing supply of original content that only lives in the digital world. It’s about reaching consumers. This year the industry has voiced a united, “We get it.” But the lingering question is how do we do it?  How do we allocate across screens to maximize ROI?  To make holistic, screen agnostic planning a reality, you need the right tools.  

The Start of the Digital Revolution
In the pre-video era before brand advertisers had fully embraced digital, the idea of ad buying was to sell a product for more than it costs to advertise it. That’s the win.  Everything else — flighting, context, dayparts, targeting — was of little consequence. 

But that was the past. Now, with more brand advertisers entering the digital space, digital media providers understand the importance of upfront selling and buying as much as the television side of the house.  That is why we are seeing ever increasing investment in the production of NewFronts, as well as more talk of “programmatic reserved buying,” and private exchanges, which in short, is an automated way to sell reserved inventory directly to a buyer. 

The Emergence of Cross-screen Planning Tools
While we are seeing an explosion of mobile devices and content the video marketplace is just this year evolving to catch up with capabilities that enable scientific, real-time analysis of cross-screen allocation and media mix modeling. Technology providers needed time to test newly released products, and markets needed time to evaluate the outputs. In short, the tools were in place just in time for this year’s upfront season, but not quite in time to drive significant change in spending patterns.

We may see a few of the larger video powerhouses getting a slice of the pie in Upfront spending this year.  And as we enter the second half of the year, we will begin to see some of the new cross-screen planning and buying tools used in the television advertising market.  We will also see a greater awareness and adoption of these tools among both the traditional television planning and buying groups, as well as the digital groups who historically owned the relationship with programmatic buying technology providers.  As media continues to converge across TV and online, much more converged buying strategies will be happening in next year’s Upfronts.

The Scarcity Effect and the Importance of Certainty
Some would argue that as convergence takes hold and viewing disseminates across screens, buying will become more audience focused, thereby diminishing the importance of the upfront conversation.  As a true believer in the benefits of programmatic and audience buying, I absolutely agree that audience buying will grow increasingly important.  However, audiences alone will not replace great content, and great content is always limited.  Thus, scarcity will remain a driving force behind the continuation of upfront video buying—as will the need for certainty.

Most markets, not just the media market, are futures based. Look at the stock market’s response to a presidential election, for instance.  When a clear winner can be ascertained—regardless of which party comes out on top—markets begin to rise.  There is tremendous value in certainty. Within the media market, this is particularly true for brand marketers.  They need to know exactly when their messages will be delivered, to how many people, at what cost.  There is simply too much riding on the consequences of uncertainty.  Everything from production schedules to warehouse fees need to be calendared out and are dependent on guaranteed advertising and predictable, corresponding sales. 

Key Reflections: Upfronts 2014/15
Television-centric brand advertisers want to buy video across screens the way that they have been buying television for years—only better.  Better means more automation, more data and greater accountability, with the same level of certainty.  And most importantly—they want to do it holistically across linear TV, online, tablets—with the same seamlessness that consumers are watching. The tools are finally here to do that.  And now that the festivities of the Upfronts and NewFronts are over, the conversations, testing and analyses are underway that will set the stage for a very different, more converged finale to the 2015/2016 buying season.  The industry is ready.

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