Why This Matters Digital ad growth slowed when advertisers realized there messages were running close to questionable material.
The word premium gets tossed around a lot during the NewFronts, as digital media companies seek to continue to attract video advertising dollars that were once earmarked for TV.
Digital advertising has been growing, while TV ad revenue has been largely flat, and video is one of the fastest-growing digital categories. That growth was pinched when major advertisers found their ad running next to questionable content on Google's YouTube.
Digital content companies have responded by emphasizing their premium video. Premium content is something that's hard to define, but as the Supreme Court once said about pornography, you know it when you see it.
Dani Benowitz, executive VP and director of investment at Magna Global, said premium video meant long-form, well-produced content, but a second definition has more recently been added.
I think now premium video includes a brand-safe environment where you're not worried about your association with the content you're running in, where there are processes in place to ensure the safety of our advertisers, he said.
Most presenters at the NewFronts offer at least some premium video, Benowitz said, adding she expects safety issues to be addressed. I think everyone's going to talk about it. Certainly, the Google folks will talk about it on Thursday [May 4]. Also shaking up the online gold rush were questionable metrics from outfits such as Facebook and more general concerns about viewability and fraud. Those issues helped contribute to what appeared to be a flow of cash back to TV from digital.
According to Standard Media Index, digital ad-spending growth was just 6% in the first quarter, down from 19% a year ago. And though it's the first time digital growth has been in the single digits since SMI began measuring it, it still beats TV ad growth. SMI CEO James Fennessey said the stunted growth reflects the impact of quality and viewability issues for digital, although pure video sites were up 28.2%
Related: Six-Second Ads Coming to Google Preferred
Long-lingering concerns around fraud, brand safety, measurement and other issues held by a subset of the industry [have] now emerged as mainstream issues for the industry, Pivotal Research Group media analyst Brian Wieser added.
These concerns have spread to all levels of management.
We remain firmly convinced that a substantial number of senior decision-makers within large marketing organizations were either oblivious to the downsides of digital advertising - primarily because they have had other, more important issues to manage, or have been willfully ignorant, Weiser said. It's nearly impossible for marketers to be either of these things now.
Many of the key companies presenting at the upfront are pushing their chips all-in on premium video.
We have probably the most premium content. We even had a nomination for an Academy Award this year, Cond Nast Entertainment president Dawn Ostroff said. Our content is probably the highest in terms of premium quality, and we are also in a safe environment because we sell our own content. So when an advertiser buys our content, they know what they're getting, not only in terms of content, but where it's going and I think that really does set us apart.
Soothing Sponsors a Priority
Reassuring sponsors about the environment and the reach of ads is a priority. We're in a time of digital skepticism and people are concerned about a lot of the ecosystem in areas of viewability and measurement and controversial content and by and large Hulu is one of the places where you largely don't have to worry about that stuff, Hulu senior VP of ad sales Peter Naylor acknowledged.
Hulu's environment is brand-safe because it's all broadcast and cable, high-quality original television. And if people don't want, for example, TV-MA [rated content], I can exclude it with a push of a button. I don't have to worry about [user-generated content] or some of that other stuff, Naylor said.
As I talk to CMOs and chief investment officers at agencies, what's on their minds around video is they have this challenge where they want high quality, and that bar has never been higher. But they also want scale and they feel like they have to make the choice between the two, Twitter VP of global revenue and operations Matt Derella said. Premium video is very, very scarce, and when you start going into the scale business, the actual quality goes down, the fraud goes up.
At the NewFronts, Twitter will tell clients it offers both quality and scale. They love that we're bringing the premium, safe, high-quality content and then delivering it at scale to all of our users, and using all of the rich targeting they've come to know from Twitter, Derella said.
We are doubling down on premium products and video and that actually enables us to be able to be a bit inoculated from the parts of the internet that all of us could do without, Chris Berend, cofounder of Great Big Story and senior VP for CNN Digital Video, said.
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Why This Matters Digital ad growth slowed when advertisers realized there messages were running close to questionable material.
