TV Upfront Inspires Digital Copycat

The TV Upfront may be the biggest week of the year in television: five days in May when television stars and network executives converge in New York to tout their hot new shows for advertisers.

Now, online video wants its turn. This April the biggest online media outlets—including Google Inc. and its YouTube site; Yahoo Inc.; Hulu LLC; AOL Inc., and Microsoft Corp.—are planning a two-week event in New York. Each company will take a different day to woo advertisers by presenting different marketing opportunities such as revealing plans for coming video programming.

Coming as more companies are creating more original video programming specifically for the Web, the event signals an intensifying effort by the online video world to challenge television.

The event is dubbed “Digital Content New Fronts,” a not-so-subtle reference to the “upfront” name for television’s week of glitzy presentations and lavish parties. The upfront is a prelude to weeks of negotiations with advertisers about purchase of ad time for the coming fall season. After last year’s upfront, advertisers committed to spend $9.3 billion on the broadcast networks, the lion’s share of networks’ prime-time ad inventory, estimates John Janedis, an analyst at UBS Securities.

TV drew $60.7 billion in advertising last year, estimates eMarketer. In contrast, ad spending on online video in the U.S. totaled only $2.02 billion— but it was up 55% from 2010. More than 100 million Americans watched online video content on an average day, a 43% increase from the year prior, according to comScore.

“There is a big gap between the time consumers are spending on digital platforms and the amount of ad spend” that the business is seeing, said Mickie Rosen, senior vice president of Yahoo Media Network.

The online video ad market needs to be better organized to make it easier for marketers to buy spots, said Mr. Kinsella. Online media outlets hope that by aligning their efforts they have a better chance of persuading advertisers to commit early to online ad packages—just like for TV. Most online ad packages are bought closer to when they appear.

Getting advertisers to commit in advance will give digital companies better visibility of what revenue will be and allows them to invest with more confidence in new programming, said Yahoo’s Ms. Rosen.

This was a “natural opportunity for us to sit together and think how we can push the industry forward,” said Janet Balis, head of sales.

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