Big-box retailers set their sights on digital NewFronts
The Digital Content NewFronts have always been a smorgasbord of little-known startups, mixed among the publishing stalwarts, searching for their big breaks the one time of year the whole industry is paying attention.
But this year, it’s not the little guys with their internet-friendly names invading the event. The big-box stores Walmart and Target, relic retailers with aspirations in the ad business, are making their way to the NewFronts (April 29 through May 3 in New York City). These commerce giants are stepping into the competitive world of internet advertising and media, looking to succeed as ad platforms where many upstarts have failed. Machinima and Makers, for instance, once the new faces of online video—managing networks of web celebrities and original programming—were bought by Warner Bros. and Walt Disney Co., respectively, and withered (AT&T shut down Machinima after buying Time Warner, and Disney downsized Makers.)
The addition of Walmart and Target is a sign the NewFronts are evolving beyond content into a showcase for commerce, too: The event is moving away from traditional ad deals, where presenters lock in brands for long-term commitments that last the year, and is becoming a jumping-off point for building relationships with advertisers that could go deeper than 30-second commercials and banner ads.
“There are so many changes going on in the landscape, everybody is playing in everybody else’s space,” says Scott Donaton, global chief creative and content officer at Digitas. “You’ve got retailers acting like content creators, content creators acting like platforms.”
The NewFronts, a time for YouTube, Twitter and Hulu to showcase their best content and ad products for the coming year, were conceived as an alternative to the dusty mode of TV upfront ad presentations. And this year, advertisers expect an especially dynamic NewFronts thanks to the retailer invasion, and the internet ad landscape converging with commerce, content and data. Twitter is going after YouTube, and Hulu after Walmart, and Walmart after Amazon—which won’t even be at the NewFronts, but looms large over it because of its growing advertising business. Meanwhile, publishers including The New York Times and Condé Nast are crafting stories about their futures to stay competitive, and hoping to show advertisers that there’s more value in working with professional media creators than data and automation alone can provide.
Fifty-six-year-old retailer Walmart is taking the wraps off a state-of-the art advertising technology service at its first official NewFronts (Last year, Walmart presented at NewFronts West, but this is its first time attending the main event in New York City.)
“We have new abilities we didn’t have before from a technology standpoint,” says Stefanie Jay, VP and general manager of Walmart Media Group.
How did Walmart get here? Well, this year it stopped working with WPP Group’s Triad, which once had exclusive access to run the retailer’s media services. Brands and rival ad agencies had to go through Triad to plan marketing on Walmart, but at the start of the year those services were brought in-house. In April, Walmart also announced it will acquire Polymorph Labs, an ad-tech startup that will bring expertise in automated online advertising. Polymorph’s self-serve technology will help Walmart build software that lets brands manage their own marketing campaigns on its properties.
Then, of course, there’s Vudu, Walmart’s ad-supported video service, which streams movies and TV shows. At its NewFronts presentation, Walmart will show how it can connect its ad technology to its video service to its online shopping experience, all backed by its secret weapon: consumer data about what a large portion of Americans buy every day.
“Advertising is all about data, and we have 90 percent of Americans shopping with Walmart every year,” Jay claims. “It’s an incredible competitive advantage as a retailer in the advertising space.”
Target takes aim
Target has a media network similar to Walmart’s offering, meaning it can already help brands tap into its formidable cache of shopper data to power online marketing campaigns, and it has relationships with premium publishers like Meredith and Hearst. The company is revamping that media network ahead of the NewFronts.
“Something You Know Is Becoming Brand New,” Target says on its media network website, which has been under construction during the weeks leading up to the NewFronts.
Target is no stranger to running marquee content properties, albeit unsuccessful ones. Target Ticket, which closed in 2015, was a connected TV app allowing people to rent and buy streaming movies and shows. Consumers could access the app through TV-connected internet devices such as Roku. Advertisers expect Target will have a new content play to justify its presence at the NewFronts.
“One of the filters to participate in the event is needing to create original video programming at scale,” Donaton says. “You’ve got to have that.”
However, Target says it’s simply building on its ad platform. “We will be providing an exciting update on an existing business venture,” a company spokesman wrote in an email.
George Manas, president and chief media officer at OMD USA, says that Target and Walmart both have the chance to “really make a dent in premium video.”
Streaming TV stalwart Hulu is having quite the year. With Walt Disney Co.’s acquisition of 21st Century Fox, the Mouse House assumed more than 50 percent ownership of Hulu. Also, AT&T just sold back its 10 percent stake. As Disney builds Disney Plus, an ad-free streaming service to compete with Netflix, Hulu is becoming the place for digital advertising within the broader company, and that advertising proposition is evolving.
With a lineup of original shows and network streaming rights, Hulu has always been an online alternative to TV advertising. Increasingly, however, it wants to be a direct-marketing channel with sophisticated targeting.
That’s the kind of advertising that would be more at home on Walmart’s website than a connected TV.
“We don’t even think about CPMs,” says Peter Naylor, head of ad sales at Hulu, referring to the practice of pricing ads according to how many views they receive. “We think about CPW, cost-per-whatever, whatever the advertiser needs to feel comfortable based on their priorities. We go to market in many ways. We have a national team, a local team, a performance-marketing team, a programmatic team and we do deals based on advertising priorities.”
YouTube, Twitter play niche
These digital platforms are why the NewFronts were conceived—a showcase was needed for the insurgent internet properties to tease ad dollars away from TV.
This year, both companies are expected to refine their approaches, straying away from high-cost content that mimics TV and returning to their roots. On YouTube, that means fewer costly “originals” and more videos from its most popular stars. For instance, YouTube just announced a new show with homegrown talent Marques Brownlee, who will showcase retro technology.
“YouTube is going for a deeper content library than before,” says Manas of OMD. “Within that library we’ll see more niche shows catering to specific consumer interests. It looks a lot more like mid-funnel type of content versus hero programming.”
Twitter also is less interested in buying high-cost rights for major entertainment properties, as it once did with the National Football League. Instead, it’s looking for areas where it can stand out and focus on its unique attributes as a media platform. For instance, this season, it worked with the National Basketball Association to stream parts of games from the perspective of one player on the court—what Twitter called an “iso-cam.”
This will be Twitter’s third year presenting at the NewFronts. In past years it showcased new shows with BuzzFeed and Bloomberg. The service has ties to the Professional Golfers Association and FIFA Women’s World Cup.
“We’re really focused on a fewer number of content partnerships,” says Sarah Personette, head of global Twitter client solutions. “But we’re going to go much deeper into what [makes up] those content partnerships and how that’s connected to the audiences on Twitter.”
The New York Times and publishers tug hearts
The traditional media players also have a new focus this year. While the retailers are looking to leverage shopper data, and the platforms have niche audiences to serve to a wide swath of brands, the publishers are going for emotions and stories.
Sebastian Tomich, global head of advertising at The New York Times, says the publisher is making an appeal to fewer but bigger advertisers to support the newspaper’s content initiatives around podcasts, live video, in-depth storytelling and new events like a food festival planned for this year.
Instead of programmatic advertising based on data, and targeting readers based on how much personal information the publisher can mine, the Times is emphasizing context, Tomich says. This year, it launched an editorial series called “The Privacy Project,” so it makes sense that it wants to shun those tactics on the business side.
“There’s a push toward contextual targeting, and we’re building a variety of ad products based on that,” Tomich says. “We’re looking really hard at the article you’re on, and using that for the basis of targeting, versus the person who’s reading it.”
Advertisers say that other traditional publishers are taking a similar route in their NewFronts pitches, prioritizing their ability to include brands in their content strategies.
This is setting up a NewFronts of paradoxes, Manas says: On one side is the cold and calculating data plays of a newcomer like Walmart and the programmatic promise of YouTube. On the other, the publishers that want to pull at the heartstrings.
“Condé is talking all about brand integration opportunities, putting brands inside series,” Manas says. “Those are big creative endeavors, very emotional, as opposed to the data-driven rational side of technology.”