The New Upfront: TV Is Just Video

Why Advertisers Are Getting Agnostic About Where Their Video Ads Appear

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Matt Wasserlauf
Matt Wasserlauf
When John Muszynski, chief investment officer at SMGX, sat next to Tracey Scheppach, senior VP of innovations at VivaKi, in the opening of this year's upfront negotiations in Chicago, I felt like I was staring at the dawn of a new era in online video. That a holding company-level head of TV negotiations was working in partnership with the head of video innovation signals the beginning of a very new upfront, one that would be markedly different from those of the past.

The reason this year's upfront will be different from those of the past has everything to do with the ascent of online video. Two developments in online video that have made this possible are structure and scale.

Let's begin with online video's structure. To those of us who have worked in the industry for some time, this development has been a long time coming. Ad agencies are now assembling themselves so that the online group works more in coordination with the traditional broadcast groups. Agencies have recognized that video is video, whether it's online or on TV. This coordination has been necessary for a long time, but has been challenged from the start. To begin with, a lot of resentment existed fresh off the boom-and-bust cycle from the early '00s when Mark Cuban ran off with his billions from the sale of to Yahoo. The promise of online video dimmed as the recession iced over the market and allowed the distance between broadcast and online to grow. When the YouTube sale to Google happened in 2006, these two departments became more curious of one another and the frost began to dissipate.

Now, here in 2010, leaders in online video are bringing online and offline together. I've referred to Starcom Mediavest and VivaKi, but others like Walt Cheruk and Andy Donchin at Carat are further examples of this. These groups understand that their clients need to have these efforts more integrated in order to secure premium content and efficient pricing. Clients are eager to extend leading positions in broadcast into online video and need the models to which they buy translate across these mediums.

The second reason that this year's upfront will be different from years past is because of scale. Rob Master, media director of Unilever, said in the Wall Street Journal on April 26 that "rate increases could push dollars away from TV." Mr. Master could not have made this statement unless scale existed online, and online video in particular. With scale in video today exceeding 33 billion streams per month, according to ComScore, online video can support a $6 billion market (today, it's only $1 billion). Clients such as Reckitt Benkiser and Mr. Master's Unilever are moving considerable budgets into the medium to capture those first-mover advantages, but we've only seen the tip of the iceberg. This year's upfront promises to be the catalyst.

So it is because online video has structured itself alongside TV and TV scale has begun to demonstrate itself online, that we're embarking on an entirely new chapter in online video.

Mr. Muszynski will have it no other way.

Matt Wasserlauf is the CEO and founder of BBE. Mr. Wasserlauf has spent 19 years in media and broadband advertising including stints at Feed Room, CBS and Warner Bros. before pioneering a new industry: online video advertising.
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