Upfront Sales Soar for Digital Outlets

Jun 15, 2008  •  Post A Comment

The final numbers aren’t in yet, but most broadcast networks and media agencies are expecting digital sales in the television upfront ad market to be 25% to 30% better than last year.
“It is bigger than last year, and I would guess it’s close to 25% to 30% higher,” said Adam Kasper, senior VP and director of digital media at Media Contacts, a division of Havas. “Networks are pushing it much more than they had and [are] coming up with more well-rounded offerings and different and creative ways to sell content.”
Most of the Big Five networks concluded their annual upfront sales last week; they say integrated packages with online extensions played a larger role than last year.
The sales uptick is a sign that dollars are following eyeballs online and that networks are beginning to monetize new distribution venues for their programming.
Advertising in streaming video, the fastest-growing segment of the interactive ad market, should hit sales of $7.2 billion in 2012, according to Forrester Research. That’s up from $471 million in 2007.
Upfront increases are coming because advertisers are making more and bigger deals and because networks have increased digital inventory to offer compared with last year.
CBS, for instance, began selling the CBS Audience Network, a distribution network for CBS shows across the Web, when it launched last fall. It includes CBS.com, as well as Joost, AOL and others. By contrast, at last year’s upfront, CBS’ online selling focused primarily on CBS.com.
As a result, some agencies allocated placeholder money this year specifically to CBS Audience Network during the upfront. In the coming weeks, CBS will work with those agencies and their clients to develop customized packages and online campaigns.
Some of the buys are part of larger TV buys; others are pure digital buys that occurred during the upfront because that’s when advertisers are in the midst of planning and buying.
Digital sales, however, remain a year-round process, said Jo Ann Ross, president of CBS Network and Interactive Sales. That’s because inventory isn’t scarce online, as it is on-air.
The biggest difference this year is in the scale and scope of buys, network executives said. Digital offerings are maturing and advertisers are becoming more comfortable backing them.
At NBC, each of the broadcast network’s “tentpole” events, such as season premieres, season finales, special episodes, sporting events and award shows, were sold as “360” packages, the network said. That means the network sold on-air spots coupled with online extensions, such as messaging in a video player or a widget, for instance.
Prior to the upfront, NBC had predicted an increase of at least 20% to 25% in digital sales. The final increase looks like it will be north of that, the network said.
“The agencies who are more aligned and more together are taking advantage of it, and the guys who are still siloed realize that needs to change,” said Peter Naylor, senior VP of digital media at NBC Universal.
Indeed, some advertisers are allocating integrated dollars for TV and online campaigns, Mr. Kasper said. “On the other end of the spectrum, there are clients that don’t believe in it, don’t want it and are just buying TV,” he said.
Fox declined to comment specifically on digital sales. “Fox has concluded our prime-time upfront sales at volume and pricing levels consistent with the No. 1 network,” Fox said in a statement.
ABC was still conducting deals late last week. An accounting of The CW’s digital deals was not available at press time.

One Comment

  1. Two questions — first, is this online advertising surge limited to network associated inventory where the sell is linked to sales of on-air inventory, or is ad spending moving online organically, in a way that can benefit online platforms without the muscle of on-air inventory and the networks’ advertiser relationships? second, as the networks are all part of diversified media companies these numbers are not likely to move the stock price needle; what are pure plays (or purer plays) for investors looking to ride this trend?

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