Since 2008, digital video publishers have used NewFronts presentations to try to compete with TV. And like TV's decades-old upfronts, the NewFronts have regularly showcased high-quality original series with impressive star power. But many online original series have failed to find meaningful audiences, and concerns over viewability, ad fraud and ad blocking are creating an undertow.
Growth in ad spending on digital video will slow to 19.1% next year from 28.5% in 2016 and 46.2% last year, according to eMarketer. Even as TV grows just 2% per year, it maintains a vast lead: eMarketer predicts TV ad spending will total $77.2 billion in 2020, up $1.9 billion from the year before, compared with $16.7 billion for digital video, up $1.5 billion.
"The NewFronts have become two weeks of a lot of presentations with not a lot of tangible opportunities coming out of them," said Jon Stimmel, chief investment officer, UM. "They need a better agenda and to more clearly state what is the true value play." The biggest problem, Mr. Stimmel said, is that digital publishers are not presenting a clear narrative regarding the distribution opportunities, targeting or achieving broad reach.
"For years, the TV upfronts have been trying to look more like digital, and NewFronts have been trying to look more like TV," said Jon Anselmo, president-strategic digital services, Omnicom Media Group. "Hopefully, this year the NewFronts will go beyond that, not just showing off slates of content that they are trying to establish as TV-quality, but showing off content and strategies that harness the true power that digital provides."
The Interactive Advertising Bureau, which convenes the official NewFronts events, said ad buyers recognize that there is a limited amount of high-quality programming online. "Viewers are turning to digital video more and more, saying that original digital video programming in particular is more innovative, edgy and unique -- not to mention more mobile -- than regular TV content," said Anna Bager, senior VP and general manager-mobile and video at the IAB, in a statement provided by a spokeswoman.
While publishers will still be seeking TV ad dollars with their original series, Mr. Anselmo expects them to show off more data capabilities that enable smarter, more agile content development that delivers "at the pace and with the personalization that the modern consumer expects from media."
Digital media is also likely to continue teaming with traditional media, the way Viacom agreed this year to sell ads for Snapchat and NBC Universal has taken stakes in BuzzFeed and Vox Media. A Mashable spokesman said it will announce more details of its programming partnership with Turner on the heels of Turner's recent investment in the company.
"Networks realize in order to be relevant with the modern audience, they need different infrastructure engagement mechanisms, and in order for many digital partners to gain ubiquitous credibility, they need TV credentialing," Mr. Anselmo said.
AOL is abandoning its stage show this year, opting for an event that better reflects how consumers actually watch, said Allie Kline, chief marketing officer. The company is taking over a stretch of New York's South Street Seaport for areas dedicated to news, tech, autos, entertainment, sports and music.
Yahoo, a founding partner of the NewFronts, shuttered its digital video site, Yahoo Screen, in January. Instead of a glitzy show like the one it held at Lincoln Center last year, when it announced 18 new series, the company will host a private event at its New York sales office.
Hulu will showcase its library of content and originals, but also address concerns over accountability and make an announcement regarding measurement and research, said Peter Naylor, senior VP-sales, Hulu.
"There's a huge push in the industry to become more accountable than we've been in the past," said Ari Bluman, chief digital investment officer, GroupM. "We are only buying ads that are bought and seen by humans. Everyone we buy inventory from has to sell us 100% viewable ads."
Digital video publishers hope they will find leverage in TV's ratings erosion. "Advertisers are anxious about meeting their reach and frequency targets on TV," said Tara Walpert Levy, managing director-agency sales, Google. "They want more alternatives lined up so they are prepared."
Last year, YouTube quickly sold out of its Google Preferred inventory, the top 5% of its most popular content in areas like music and food. "We have found some creative ways to open up inventory that's similar to Google Preferred to meet demand," Ms. Walpert Levy said.
One of the most intriguing developments expected to come out of the NewFronts is virtual reality content. Hulu recently introduced its own app for the Samsung Gear headset and plans to create original content in the near future.