October 17, 2017

Media Giants Chase Online Ads With Original Shows

Digital and traditional media companies, including newspapers and magazines, have for years been building a video presence on the Internet. But until now the offerings have largely been low-budget, single-camera affairs featuring talking heads.

Last week, however, major media companies like Condé Nast, The Wall Street Journal and Univision presented ambitious slates of original programming to advertisers for the first time.

Companies that were already producing Web content, like Yahoo and Hulu, also announced greatly expanded offerings.

As a result, viewers are being bombarded with an array of new Internet programs — 11 from Yahoo, 14 from AOL and a whopping 30 from Condé Nast, including one that will let viewers watch a Vogue editor, Hamish Bowles, as he shops around the world.

Hulu’s four new original offerings include one called “Behind the Mask,” a show it describes as a “comedic docu-series,” which looks at the world of sports mascots.

These companies are moving rapidly because they believe viewers are now so accustomed to watching programs on devices like mobile phones and tablets that the lines between traditional television and Internet video will blur.

But the companies are also acting out of desperation because many of them can command higher prices for video ads than traditional online banner ads, which are increasingly being undermined by fast-paced algorithmic buying technologies.

Advertisers are also shifting dollars from traditional display advertising to sites like Facebook that can deliver huge audiences. Media companies were wooing ad executives in New York last week during an advertising event called Digital Content NewFronts that is trying to imitate the success of the network television upfronts, which are being held later this month. At lavish open-bar parties, companies not previously known for programming tried to convince advertisers to sponsor shows, or better still, whole channels.

Yet even with the amount of so-called premium content booming, it is not clear ad dollars are following. According to data from the research company eMarketer, spending on digital video — while growing — is expected to reach only $4.14 billion in 2013, a far cry from the $66.35 billion expected to flow into the television market.

Many advertisers say they worry that with so much new content being thrown at the market on so many different platforms, audiences for individual shows will become even more fragmented and microscopic than they already are.

“I don’t care how good your attention span is,” Rino Scanzoni, chief investment officer of Group M, said of the crush of new offerings, “I think it becomes all a blur.” Group M is one of the world’s biggest media-buying and planning agencies.

Ben Winkler, chief digital officer of the advertising agency OMD, which represents brands including Pepsi and Nissan, called it “cable to the nth degree.”

“We are talking narrow, narrow television, niche television if you will,” he said. “If you are reaching just 100 people, is it worth our time and energy?”

AOL is one of the companies making a big bet on “premium video,” or video it hopes will generate greater ad revenue because of higher production values. Tim Armstrong, the company’s chief executive, said in an interview: “Consumers are adopting video very quickly: big investment in devices and networks, big investments by the most talented creative people to get involved in this medium; and big investment in measurement. So I think this industry is about to explode.”

Many online sites are citing the success of “House of Cards,” the Netflix series that drew critical praise this winter, as proof that the moment for video content has arrived. But “House of Cards,” with top-flight talent and sophisticated production values, was hugely expensive. And Netflix relies on subscriptions, not advertising.

For now, most digital companies are looking to produce programming that, while more expansive than one-camera fare, is still cheaper than TV.

Bill Carter contributed reporting.

Article source: http://www.nytimes.com/2013/05/06/business/media/media-giants-chase-online-ads-with-original-shows.html?partner=rss&emc=rss