Digital-native programming is maturing and attracting talent, budgets and advertiser money, whether it’s social media influencer content or programs that began by adopting broadcast models, like news and sports.
The Digital Content NewFronts demonstrated a convergence of traditional and digital media is moving forward at speed. Social influencers such as YouTube star Lilly Singh—soon to have a late-night NBC show—are crossing over into TV channels, while movie stars like Reese Witherspoon are producing content for streaming channels under exclusive partnerships.
“We’ve passed the tipping point.”
Peter Naylor, Hulu’s head of ad sales
The streaming movement is booming, Naylor said; 75% of households how have two or more streaming services.
The digital video ecosystem is so crowded that players need to leverage every edge, from data to the built-in communities brought by influencers, in order to compete. The streaming platforms want to benefit from the preexisting audiences and social amplification influencers bring to their new programming, at a time when over-the-top platforms are reaching “peak video” and the competition for viewers and advertisers becomes tougher.
“Media begets media behavior” said Sara Baehr, co-chief investment officer of Horizon Media. Each action online generates retargeting, remarketing, data “and you connect all the dots,” she said.
“We’ve always talked about this idea of convergence… but what you’re seeing is all media is impacted by each other,” said Baehr.
Consumers are no longer differentiating between the experience of streaming video content or watching television, said several speakers at NewFronts. They noted the challenge remains to keep them engaged with the content and find ways to monetize it—whether by subscriptions, advertising or sponsored content.
“Streaming is TV. It is simply better TV,” said Hulu CEO Randy Freer, who noted that last year, more people watched streaming video than pay TV for the first time.
The annual presentations to media buyers showed online platforms are evolving past depending on recycled TV and movie content and increasingly are building their own stars and audiences. Conversely, traditional media platforms that expanding into podcasts and other digital content are also partnering to extend their reach to new audiences of cord-cutters and cord-never media consumers.
“People just aren’t watching TV like they used to,” said Allan Thygesen, president Americas of Google. YouTube now reaches more 18- to 49-year-olds in one week as all cable TV networks combined, he said.
Engaging younger, digital-native audiences is the future, but engaging them in advertising content continues to challenge platforms. Many are experimenting with alternative formats. Hulu launched a new ad format built especially for when bingeing viewers pause their stream, while capping the length and frequency of ad breaks on its ad-supported service.
At the same time, Hulu is leveraging social media activity to build its audience. CMO Kelly Campbell noted social media activity around Hulu shows has grown 40% in the last quarter and acknowledged the influence of social media and influencers by announcing a deal with the production company of model and influencer Chrissie Teigen to curate food and lifestyle content.
Campbell also noted that with the upcoming 2020 election dominating social conversation, Hulu will join the non-profit Rock the Vote to launch a series to engage young voters, 31% of whom didn’t vote in the last election.
Research has found that, when asked what they want to be when they grow up, most of today’s teens want to be social media influencers, said Mark Book, head of content North America at Digitas. Teens think “it’s not bad to be a sellout, if you embrace it,” he said, and noted this year spending on influencer marketing beat print for the first time. Influencer marketing is set to become a $10 billion industry by 2020, noted Reesa Lake, EVP of brand partnerships at Digital Brand Architects.
It used to be content creators aspired to become celebrities on TV, said YouTube Chief Business Officer Robert Kyncl. Today, the celebrities want to become creators, he said. YouTube launched a new slate of content that combined original shows created by singer Alicia Keys and more episodes of the hit “Karate Kid” sequel “Cobra Kai” with digitally-native content from YouTube makers such as Dude Perfect and Simone Giertz.
The New Normal
The digital video ecosystem is so crowded that players need to leverage every edge in order to compete, including quality first-party data. Several media companies announced enhancements in contextual targeting to their platforms to help advertisers reach the right audiences, as well as new sponsored content features and partnerships. The New York Times announced it has added both emotion-based targeting and will add motivation-based targeting in the fourth quarter that gauges the likelihood a customer will carry out a particular action, said Alison Murphy, SVP ad innovation.
The expansion and relaunch of content-hungry streaming platforms like Roku Channel, Pluto and more are proving a fertile ground for content makers from social influencers to established media properties. The streaming channels are consuming content voraciously, while publishers struggling to diversity beyond traditional media are willing partners.
The streaming platforms want to benefit from the preexisting audiences and social amplification influencers bring to their new programming, at a time when over-the-top platforms are reaching “peak video” and the competition for viewers and advertisers becomes tougher.
The New York Times Co., which has had success recently in the podcast area, chose to partner with Hulu and the cable channel FX to launch “The Weekly,” a news magazine featuring the newspaper’s longform feature journalism, while also expanding its podcast content.
“We’re going to double down on the brand at The New York Times,” said Seb Tomich, global head of advertising and marketing solutions. The industry is reaching “peak content” which makes relationships with trusted platforms worth a premium, especially in these days of “fake news” and trust issues. Tomich noted that as consumers gravitate to different channels, the relationship with a news provider will become more important.
Trust is under pressure like never before, said Michael Kahn, global brand president of Digitas North America, which dedicated its entire NewFronts presentation to the topic.
Indeed, trust and brand safety loomed large in the conversations at the NewFronts.
Brand safety “hit the advertising community like a bomb” with 2017’s “ad apocalypse” said Matt Crowley, head of sales at Studio71. In April 2017, reports surfaced of established brands’ ads appearing as pre-roll spots on objectionable content online, including terrorist videos.
“If you had a drink when you hear ‘premium content, safe environment’ … we’d all have alcohol poisoning.”
Sara Baehr, co-chief investment officer of Horizon Media
Two years later, the industry is still dealing with that concern and publishers are now seeing inappropriate comments and inappropriate links in comments becoming an additional problem, he said.
“We needed to go above and beyond guardrails,” said Crowley.
If anything, new reports of data breaches were keeping the issue alive and upfront at NewFronts. Several publishers, including YouTube and Studio71, noted they have added human review and artificial intelligence to the automation used to weed out questionable content, in order to fine-tune the process.
The Gen Z cohort is more diverse in terms of race, gender identity and other social groups than any in history, so many NewFronts presenters noted media will need to adjust to that fact in its brand-safety efforts. Vice argued that traditional guardrails established by media buyers are no longer valid and automation has resulted in unintended consequences such as barring spending on content that legitimately advances the conversation on social issues.
“Bias must not be the collateral damage of our brand safety efforts,” said Vice SVP North American Client Partnerships Cavel Kahn. The company announced its removed a long list of LGBTQ, racial and other identity-based keywords from content blacklists after a staffer drew it to the attention of CEO Nancy Dubuc. Many of those blacklisted words described staffers and members of Vice’s audience themselves.
“Quality data, predictive analytics, talent, social distribution and now expanded scale,” said Peter Leeb, EVP Head of US Partnerships & Operations of Studio71. “This is the new normal”