AOL, Microsoft lure advertisers with TV-style shows at NewFronts

Advertisement
By Reuters | Updated: 25 April 2014 19:55 IST
Technology powerhouses like Microsoft Corp and AOL Inc are flexing their muscles as storytellers, parading TV network-style shows before advertisers at an annual digital content showcase in New York next week.

With an eye on the big bucks such shows can command, Microsoft will trot out a soccer reality show called "Every Street United." Sony Corp's digital network Crackle will serve up Jerry Seinfeld's "Comedians in Cars Getting Coffee" and AOL is presenting a documentary drama about five New Yorkers called "Connected."

This is a big shift from the short Web episodes many tech companies have presented for the last two years at the week-long "NewFronts" event - modeled after the annual "upfronts" where broadcast and cable TV channels show their wares to Madison Avenue.

Advertisement

Yahoo Inc is also looking for longer original programming it can unveil at the showcase, three people familiar with those efforts said on condition on of anonymity because the deals have yet to be finalized.

Yahoo Chief Executive Marissa Mayer said on Yahoo's earnings call last week that the company plans to make fewer, more focused investments in original content.

Advertisement

"We are going to see more original content overall and no doubt everyone is working to package their offerings like TV because they have their eyes on TV dollars," said Kris Magel, chief investment officer at Initiative, the media buying division of Interpublic Group of Cos .

But TV-scaled ad spending is unlikely to flow to online video commercials that usually run before and during a program, advertisers and analysts said.

Advertisement

"Online video just doesn't offer nearly the reach that broadcast does," said David Bank, an analyst with RBC Capital Markets.

AOL has spent about half a billion dollars over the last three years on shorter content. On Wednesday, it also inked a deal with Miramax to stream the independent studio's films on the AOL network for free, but with ads.

Advertisement

"Internet companies are bucketed into the snackable short form space," Ran Harnevo, president of AOL Video, said. "But we are seeing the growth in the consumption of content on big screens."

At the NewFronts, which starts on April 28, Microsoft will show longer original shows produced by the company's Xbox Entertainment Studios that exploit the Internet's strengths.

"The challenge TV has is it's not very effective in being able to reach a very discrete target audience and measure it and have more interactive components," said Scott Ferris, general manager of TV and video advertising for Microsoft. "We have very engaged, high-quality audiences."

Online series can get messages in front of people who watch little TV, said Peter Naylor, senior vice president of sales for Hulu.com. The website, owned by Walt Disney Co , Comcast Corp and 21st Century Fox , will also pitch shows to advertisers next week.

"There is a segment of the video universe that is very, very hard to reach through traditional television," Naylor said. "Online video is a way to reach those light TV viewers."

But because online viewers have to search for content, advertisers may end up paying more to reach them than on TV.

The cost per thousand (CPM) for a commercial on a cable network, for example, might be between $10 to $30, depending on the show and the demographic, estimates Brian Wieser, a senior research analyst at Pivotal Research Group. For online video, a CPM for a comparable demographic could be in the range of $20 to $40.

"There is a lot of aspiration in the NewFronts initiatives," said Wieser. "The reality is traditional TV budgets are intended for content vehicles that are TV-like. (Content) with short term, low budgets with unknown or even known talent is unlikely to capture anything resembling a meaningful TV budget."

Another hurdle is that the money that presenters make from the NewFronts is not tracked by the Interactive Advertising Bureau which hosts the event.

Ari Bluman, chief digital investment officer of GroupM, the media buying arm of WPP , notes the TV industry's annual showcase for advertisers exists because they can only buy so many commercial spots on TV, whereas this is not an issue online.

However, it may take some time before online shows become mainstream enough to draw big ad dollars.

Until then, the NewFronts "is more of a showcase for what's new and exciting," Bluman said.

© Thomson Reuters 2014
 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Advertisement

Related Stories

Popular Mobile Brands
  1. OnePlus Might Soon Launch a Flagship Phone With 2K Display and a 240Hz Refresh Rate
  2. Netflix Games Launches FIFA World Cup: Launch Edition Ahead of FIFA World Cup 2026
  3. Xiaomi 17T First Impressions
  4. OnePlus 15, Nord 6, Pad 4 Receive Discounts During Community Sale 2026
  5. New OTT Releases This Week : Dhurandhar 2, Maa Behen, The Pyramid Scheme, and More
  6. Motorola Edge 70 Pro+ vs Vivo V70 vs Nothing Phone 4a Pro Compared
  7. Redmi Turbo 5 India Launch Date Revealed as Company Confirms Key Specs
  8. Marvel's Wolverine Will Be a Linear Adventure, Not an Open World Game
  1. OnePlus Turbo 6X, OnePlus Turbo 6X Pro Colour Options, Price Range, Key Specifications Teased
  2. Sattendru Maarudhu Vaanilai Now Streaming Online: Where to Watch Jai’s Romantic Thriller Movie
  3. Asics GEL-Kayano 33 Launched in India With New Stability Tech, FluidSupport System
  4. Netflix Games Launches FIFA World Cup: Launch Edition Ahead of FIFA World Cup 2026
  5. Marvel's Wolverine Will Be a Linear Adventure, Not an Open World Game, Says Insomniac
  6. Googlebook Lineup Tipped to Include Eight Devices; Intel May Power Four Models
  7. New Apple Arcade Games Coming in June 2026: Here's the Full List
  8. Bitcoin Extends Decline to $62,000 as ETF Outflows and Capital Rotation Persist
  9. Redmi Turbo 5 India Launch Date Announced; Confirmed to Feature MediaTek Dimensity 8500 Ultra Chip
  10. Boat Slazer Series Grooming Solutions Launched in India With Interchangeable Attachments, Travel Kit Bundle
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.