Upfront 07

Portals Make Plays for Upfront Dollars

From Yahoo's 'In Front' Presentations to AOL's 'First Look,' Key Online Landing Spots Seek Early Exposure

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NEW YORK (adAge.com) -- OK, so it's not such a bad idea after all.

Those internet-portal folks who called the 2006 upfront "antiquated" are now coming around to the concept of an advertiser-targeted blow-out event.
Wenda Harris Millard, Yahoo's chief sales officer, says that with her company's 'infinite inventory,' a traditional upfront doesn't make much sense. Yet, in February Yahoo held its first 'In Front' presentations, attracting hundreds in New York and Los Angeles.
Wenda Harris Millard, Yahoo's chief sales officer, says that with her company's 'infinite inventory,' a traditional upfront doesn't make much sense. Yet, in February Yahoo held its first 'In Front' presentations, attracting hundreds in New York and Los Angeles.

This year, several top online portals have made their presence felt to advertisers in much more pronounced ways during a period that roughly coincides with the 2007 TV upfront.

No limits
The thinking a year ago was the upfront might make sense for TV, which has a finite number of available spots and a few hundred national advertisers. But "we don't have a finite inventory," says Wenda Harris Millard, Yahoo's chief sales officer. "In many ways, we have infinite inventory, and we have tens of thousands of advertisers."

Yet, in February Yahoo held its first "In Front" presentations, attracting almost 1,000 ad executives to its "Broadband on Broadway" event in New York and another 300 to the "Broadband on the Boulevard" in Los Angeles.

AOL lured some 500 executives to its "First Look" presentation last month in New York, with about double that number checking it out online.

It was no coincidence that MySpace, now a News Corp. sibling of the Fox TV network, also held an event last month in Los Angeles for some 150 buyers that showcased new research on social networking, says a spokesman for Fox Interactive.

MSN, Google get in too
Earlier this month, Microsoft Corp. invited members of the ad community to its annual Strategic Account Summit in downtown Seattle to tout four digital services, including MSN. An MSN spokeswoman, however, says the timing had nothing to do with the upfront.

Last but not least, Google announced a deal to sell spots on EchoStar Communications Corp.'s Dish satellite platform in early April, much in the way cable operators sell them to advertisers. Only in Google's case, it will be conducted via an online auction process.

Whether it's pure happenstance or elegantly timed, there's good reason for the portals to seek advertising exposure now. "During last year's upfront, the traditional TV sellers began to bundle their traditional TV assets with digital assets," Ms. Millard says, noting that the only exception was ESPN, which had offered advertisers bundled opportunities earlier. Because traditional TV buyers were engaged in evaluating digital options, Yahoo felt it was important to react.

"My concern was that if we didn't help buyers and sellers understand how to leverage this medium, then we would fail as marketers," Ms. Millard says.

Internet planning
Jeff Marshall, senior VP-digital managing director at Starcom USA, Chicago, sees another reason for the portals' new approach. In the online world, new advertising ideas may come up 365 days a year, but being able to take a longer, strategic view is very beneficial.

"It gives you an understanding of what the big opportunities are," he says, adding that the AOL and Yahoo presentations were "exciting and encouraging."

The two portals took decidedly different approaches. Yahoo's "In Front" presentations were deliberately not traditional, content-hawking upfront events and were more educational in nature. "Yahoo showed tools and widgets and interesting targeting technology. ... It felt like a capabilities presentation," says Eric Bader, senior VP-director of MediaVest Digital Connections.

In contrast, AOL's event was much splashier, with five new programs announced for late 2007 and early 2008 and plenty of celebrities on hand.

"I really liked AOL's approach in talking about how what they bring to the table can complement what [advertisers can] do in other parts of the marketing mix," Mr. Marshall says. "They were smart in saying, 'We would be an effective part of a marketing mix' vs. 'It's us and nobody else.' "

TV brains at AOL
Certainly, AOL's move to a traditional upfront presentation was inspired by its new chairman-CEO, Randy Falco, who's a veteran of the TV industry, but it also was a reaction to feedback from marketers, says Mike Kelly, president of AOL Media Networks.

"What we heard from clients was that even though many of the [TV networks] had many great ideas, their digital opportunities lacked scale," he says.

As a result, AOL moved from its strategy in previous years, which involved a roadshow of six or seven cities in the January/February time frame, to a six-city tour and the much bigger "First Look" event in New York.

That presentation, held at the Time Warner Center, involved appearances by personalities such as actress Brooke Burns, who's hosting a competition called "iLand," in which contestants can win a tropical island; Leeza Gibbons, who's hosting a new game called "Million Dollar Bill"; and über-producer Mark Burnett, whose "Gold Rush" game is returning for a second season.

'Amazing' response
Mr. Kelly and Ms. Millard use adjectives such as "exciting" and "amazing" to sum up clients' reactions to their events, while refraining from mentioning any specific deals that resulted from the presentations.

Whether AOL and Yahoo -- let alone MSN, Google and MySpace -- actually siphoned any upfront revenue from the TV networks during the upfront is anybody's guess, Mr. Kelly says. But he notes that internet revenue is growing much more swiftly than network TV revenue, and adds, "That money has to come from somewhere."

Indeed, the portals' new upfront strategy comes at a time when network TV is challenged. The broadcast networks grew their revenue by only 2.5% last year, and the cable networks moved up 3.4% over 2005 results, according to TNS Media Intelligence. Meanwhile, internet revenue climbed 17.3% in 2006, according to TNS.

Two Nielsen breakouts show an even wider gap. According to Nielsen Monitor-Plus, broadcast-network ad revenue edged up 2.1%, and cable was up 3.1% in the second half of 2006 vs. the same period in '05. And Nielsen/NetRatings shows that internet-portal and search-engine ad revenue grew by some 29.7% in the second half.

Wiser, if not bigger, purchases
Regardless, some believe the portals probably didn't steal much TV thunder. Christine Peterson, the New York media director of Carat Fusion, notes that at AOL's "First Look," "the vast majority of people were interactive specialists. I don't see them driving a tremendous amount of upfront buys."

Instead, Ms. Peterson says the presentations probably "triggered some thoughts and brainstorming. It means dollars will be invested more wisely."

"I know that we are going to be much smarter and have a much more strategic handling of our overall investment around the upfront than ever before," adds MediaVest's Mr. Bader.

Mr. Kelly says that AOL intends to make its upfront presentation an annual event, but Ms. Millard is more circumspect about Yahoo's plans.

"I think that we'll certainly do it again next year, because there's so much [for advertisers and buyers] to learn," she says. "We'll do it next year and then take it from there."
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