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Upfront Digital Ad Sales Primed to Rise

May 10, 2009  •  Post A Comment

With the majority of the networks’ upfront presentations still a few weeks away, it’s difficult to predict when advertisers will start spending on television and online buys. But digital executives at most of the broadcast networks are optimistic that online sales will be a bright spot this year.
If so, that will confirm earlier estimates for online advertising growth: Both Magna and eMarketer have predicted ad spending in online video will grow anywhere from 30% to 45% this year.
Despite the tough economy, digital sales are likely to rise this year, said Peter Naylor, senior VP of digital advertising sales at NBC. “I see it going up because consumer media habits continue to change and evolve, and the market continues to like the idea of buying things together. It’s a fact that TV plus digital is better for brands.”
NBC’s research indicates that marketers see a 14% to 17% rise in brand awareness and purchase intent when TV and online ads are deployed together.
Last week NBC kicked off its “infront” presentations—smaller, less flashy presentations to agencies.
On a stand-alone basis, digital ad sales are profitable and have been for a few years at NBC, Mr. Naylor said.
Other networks are bundling digital ads with on-air spots in integrated packages.
Digital sales will be a component of The CW’s presentations to advertisers in two weeks in New York, said Allison Tarrant, executive VP of integrated marketing at The CW. The network primarily sells digital as part of ad packages, she said.
“We will do some digital-only deals, but the majority will come from people who want to have a deeper relationship with a show and will be aggressive about securing the inventory tied to that show online, in mobile and on-air,” she said.
For instance, an advertiser like Cover Girl is integrated into on-air episodes of “America’s Next Top Model” and in online ads. Similarly, Verizon has bought product integration on-air for “Gossip Girl” and has produced Web series on the network’s site, Ms. Tarrant said.
She declined to disclose whether digital is profitable for the network.
CBS said its focus during the upfront will be more on the network than on online properties.
ABC recently became a partner in Hulu and likely will focus its digital upfront efforts on full-episode streaming on its site and partner sites. Fox declined to comment on its upfront plans.
Media giants such as Viacom and News Corp. have noted in recent earning reports that the ad market appears to be stabilizing, a reassuring signal entering the upfront. In fact, News Corp. CEO Rupert Murdoch and CBS Corp. Chairman Sumner Redstone both said in last week’s earnings calls that the worst is over for the economy.
Despite these corporate reassurances, the upfront is an unpredictable beast and networks are wary to predict where it will fall until the buying starts in earnest.
“The conventional wisdom is advertisers are going to continue to make assessments on whether to place an upfront bet or buy scatter and they are holding onto budgets longer,” Mr. Naylor said. ”Once they make a decision to go, they go. What we have experienced to date is just-in-time buying.”

11 Comments

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