Just four months ago, the Interactive Advertising Bureau heralded an overhaul of its annual Digital Content NewFronts slate, which it was calling the “new NewFronts.” But the IAB had no idea just how “new” this year’s event would become. In mid-March, Covid-19 shut down the industry, and the annual event went virtual soon after and then was postponed nearly two months, from the week of April 27 to this week, a delay that resulted in a significant overhaul of this year’s lineup.
In turn, we’ve morphed the annual Adweek NewFronts roundtable this year. Instead of assembling the group as usual at Adweek’s HQ, we asked a number of execs to weigh in remotely about this wild year: David Cohen, president, IAB; Jim Keller, vp, national ad sales, Hulu; Pamela Drucker Mann, global chief revenue officer and president, U.S. revenue, Condé Nast; Farhad Massoudi, founder and CEO, Tubi (which Fox bought in April); Scott Rosenberg, svp and gm, platform business, Roku; and Tara Walpert Levy, vp, agency and brand solutions, Google and YouTube. They spoke about the virtual NewFronts format, how the streaming and OTT space has evolved during the pandemic and whether they think there will be an in-person NewFronts event next year. Here are highlights from those conversations:
Adweek: What have the biggest challenges been so far as you and your company have settled into this “new normal” during the past three months?
Pamela Drucker Mann: We’ve seen a huge increase in traffic across our portfolio and at the same time, a big shift in marketing spend from advertisers to the second half of the year, which has made forecasting more difficult. But we’ve been incredibly adaptive: We’re collaborating more closely, evolving the way we do business, and really figuring out how to be effective and efficient for our partners.
Farhad Massoudi: Going through a merger of this magnitude on Zoom is not easy. Staying home, both in terms of communication within Tubi and within Fox—that’s been a challenge. I miss being in the office and just having those collegial conversations in the hallways. Also, I know a lot of people at Tubi and in our community are struggling these days, and I think about it a lot. These are difficult times, especially for some of us. On the other hand, I think we’ve figured out how to communicate over Zoom and there are some efficiencies that we have all learned as a result of working from home. In some ways, the communication has actually drastically improved. Productivity has in certain areas improved quite a bit. We’re going to come out of this stronger, and we’ve learned a lot as a result of this crisis.
Scott Rosenberg: From a business perspective I could not be more proud of our team and how they have come together, supporting one another, while at the same time helping to deliver new resources to support the millions of families now sheltering at home. In less than two weeks after the initial shelter-in-place orders were announced, we were able to get our Home Together initiative up and running, working with more than 20 partners to offer 30 days of free viewing through extended trials within The Roku Channel. We knew this was going to be the “streaming decade,” but we didn’t realize that we would experience as dramatic of a shift in just the first 10 weeks of the decade.
Tara Walpert Levy: I think the biggest challenge has just been juggling it all: our responsibilities to and care for employees, our users and our customers—let alone our families and friends!
How did usage of your platforms change when this crisis began, and what shifts do you anticipate as we start to emerge from this?
Jim Keller: Streaming TV viewing has long been on a strong growth curve, but the shifts that we began to see over a year ago have accelerated with stay-at-home orders. Compared to this time last year, viewing on Hulu is up over 48%, and we have seen an increase in binge behavior, up 40% since May 2019. Viewer engagement with “comfort” TV shows, like comedies, have experienced some of the biggest jumps. And similar to what’s happening on traditional linear services, more people are tuning in to news content on our live TV service.
Rosenberg: One clear trend we are seeing as a result of the shelter-in-place orders is accelerated migration from linear into streaming. We saw our streaming hours climb roughly 80% year over year in April. Fundamentally, we believe that the Covid-19-related shifts we are seeing now will accelerate television viewing changes already underway, encouraging brands to rethink their media mix strategies to grow investments in OTT.
We are seeing the same dynamics play out today between linear and OTT that we witnessed with the print business in the early 2000s. Print has been ceding the audience significantly to digital media, 2000 through 2008, but coming out of the 2008/2009 recession, the investment level in print never really came back to prior levels. Just as it was with digital and print, the biggest change we see post-Covid-19 is that it is simply forcing market shifts that were going to change anyway to change now—and many of these changes will be permanent.
How has the streaming and OTT space evolved as a result of so many people sheltering in place for three months, and how are you adapting to those changes?
Keller: It comes as no surprise that people are streaming more TV as they shelter in place. They’re turning to television to connect, to escape and even to create a daily routine. They’re more engaged and are watching more together, so we’re innovating to help our viewers stay connected. We just launched Hulu Watch Party, a feature in the Hulu app where viewers can virtually watch Hulu together at the same time while in separate locations. With so many viewers streaming as their TV platform of choice, there’s also a huge opportunity for advertisers looking to reach an engaged audience.
Walpert Levy: Everybody wants to talk about streaming! The challenge for brands and agencies is that while streaming viewership is indeed exploding, 75% of it is happening across just four players: YouTube, Netflix, Amazon and Hulu. And two of those players don’t offer ads right now. We felt a responsibility to make it easier for brands and agencies to connect with this audience. So we’re introducing a dedicated streaming TV package in the U.S. that combines the best of YouTube and YouTube TV on TV screens in one scalable offering that reaches 100 million people. Clients seem especially excited about this one.
What can marketers expect this week as they navigate these new NewFronts?
David Cohen: Our presenters, both traditional media companies and disrupters, will show what they have been and will be doing in response to major shifts in audience behavior. The changes that we have seen in media habits have been accelerated by coronavirus and have pushed the industry squarely into the streaming future. We will address questions like, What are we seeing with consumers and their media habits? Which behaviors are fleeting, and which will stick around? What are the opportunities and obstacles for advertisers and marketers?
What are you keeping top of mind as you prepare your virtual NewFronts presentations? What is your single most important message to buyers this week?
Drucker Mann: Our message to buyers is simple: Everything is changing, so we need to be agile. At this point, anything declarative—“Consumers are doing this”—can be thrown out the window. Buying behavior will continue to change, so we all need to open our minds and be comfortable with that. Buyers need to be flexible, and they need to be prepared to take risks even if we’re not sure what things will look like six months from now. I think we all have to be OK with things looking a little different for the time being, and not wait for everything to “go back to normal” before making decisions.
Keller: Hulu and Disney Advertising Sales are going to market together as one team. Disney has long been home to the best in sports and entertainment, and now with Hulu, the best in ad-supported streaming, which means buyers have a unique ability to reach their target audience at scale. As we prepare for Hulu’s virtual NewFront presentation, we’re keeping to our viewer-first mentality. We know that viewers want fewer, less disruptive ads, and we deliver that. Our growing audience proves that a better ad experience equals a better viewer experience all around. The single most important message for advertisers is that streaming TV is no longer a “nice-to-have” or a “place to test and learn.” It’s a must buy.
Massoudi: What we bring to the table is a very unique value proposition, especially given the times and the macro changes in the media ecosystem that’s been happening over the past several years. I think we have a very important message to deliver. One is that free has never mattered more to customers and consumers. Second is that Tubi is a prime destination that delivers cost-free premium entertainment for families without the need to leave the home, and that matters in these times. And third, brands will know that they’re comfortable since Tubi is a premium environment, brand-safe and has massive reach. And our ad load is significantly below cable TV, or even significantly less than Hulu, and that is key, especially if folks are staying at home watching many, many hours of TV. It’s important we make sure the ad load is reasonable, well within a few minutes an hour.
Rosenberg: A majority of the U.S. population now streams. And they stream a lot, yet less than 10% of all television ad dollars are focused on reaching these highly targetable and engaged audiences. This lopsided equation is beginning to change as brands recognize that they don’t have to sacrifice on agility, control or value. In my conversations with brand leaders, it is clear to me that they should also expect—and I would say demand—that their media and platform partners deliver on the future promise of streaming the same way digital delivered when measured against print. The ability to measure true impact, to truly understand the value of every working dollar, has never been greater, and this is truly an evolutionary moment for the industry.
How have you reframed your NewFronts strategy and messaging as a result of the pandemic?
Rosenberg: Today the upfront must evolve to meet the market as linear TV faces an uncertain future. All brands face a different reality as a result of the pandemic. Some products are flying off shelves, while other businesses are shuttered. Advertisers are asking for agility as the market changes. At a moment when streaming is surging, Roku plans to give brands agility, control and value to meet their unique needs. We are approaching this by giving advertisers a unique, vertically specialized roadshow to brands across entertainment, CPG, finance/insurance, QSR/restaurant and telecom. Our approach to the NewFronts/upfronts will give advertisers the flexibility and freedom to adjust to individual buyer needs and give buyers back control of the message they want to deliver today, not the one they wanted to deliver months ago.
Some media companies opted to not hold replacement events after the NewFronts and upfronts in-person presentations were canceled. David, why was it important to the IAB to keep NewFronts week intact, in virtual form?
Cohen: We’re working to build a robust future rather than just protect an unsettled present. The goal at IAB, as always, is to help publishers showcase their work in the best way possible and to give brands and agencies clear-sighted, actionable opportunities. We had extensive conversations with both buyers and presenters about this year’s unique challenges. Overwhelmingly, the industry told us that they wanted to keep doing business as best we all can. We’ve worked furiously to figure out how.
What are buyers telling you are their top priorities as they consider their media spends in the coming year?
Drucker Mann: Ironically, our advertisers’ priorities haven’t changed all that much compared to previous years. They still need scale to reach consumers and they still want things that are first to market, but they need flexibility to jump in and out. The same things they always prioritize, but with added flexibility.
Massoudi: Flexibility is key, especially during this crisis, and we see that different brands are approaching this crisis in different ways, as they should, because each category of products is impacted in different ways. Our message is about flexibility. We have all the capabilities that advertisers are looking for, the audience that’s engaged more than ever on Tubi and the premium content environment. We allow advertisers to reach them however they choose to, using whichever targeting mechanism they want to, being as flexible as possible.
“Flexibility” is shaping up to be the buzzword of the year in negotiations. To what degree are you being flexible in upfront talks with buyers and agencies this year?
Drucker Mann: 100%. Is that a degree?
Walpert Levy: We’ve never seen such variability in advertisers’ situations. We’re all in the same storm, but not all in the same boat. As a result, it’s not surprising that flexibility is the No. 1 ask we’re hearing. YouTube has always been pretty flexible. And now we are leaning in even further to understand where advertisers and agencies are at and be even more flexible and creative to meet them there.
For some advertisers, that means being more flexible on deal timing. For others, it’s about providing clients with more options to invest more, shift budgets around and/or cancel campaigns altogether as their needs change. For still others, it means helping them lean into direct response formats that offer more immediate profitable growth and marrying that over time with a more traditional brand approach.
What do you think the long-term business effects of Covid-19 will be, and how do you think it will permanently change your business?
Keller: Covid-19 has accelerated consumers’ flight toward streaming TV, and with that comes an even greater need for us to really understand and super-serve our customers. I think you’ll see an even deeper focus on data and product innovation from us moving forward. As a business overall, this experience has led us to become even more nimble, more collaborative and more creative—for both our viewers and our brand partners—and that’s going to stick with us long after the pandemic is over.
Massoudi: I predict that AVOD will be a majority of TV viewership in a couple of years down the line, and I think this Covid crisis has accelerated that change. So our mission has always been to make premium content and premium entertainment accessible, and the fact that advertisers and brands allow us to bring some joy and relief to millions of households both during this crisis and hopefully way [beyond] this, makes a lot of sense both from a company mission statement perspective as well as a business perspective.
Walpert Levy: Covid has been an accelerant, not a change agent. So whatever trend [we saw] pre-Covid-19, we’re just seeing more of it, and we’re seeing it move quicker. Businesses have absolutely been exploring and wanting assistance reimagining the customer experience. This is a jolt to the system and a wake-up call, in some cases. In others, it’s providing unusual performance air cover to take risks. So they’re getting to make quicker fundamental changes.
So it will change our business to be even closer to our clients’ full range of operations and business goals. Especially in areas that deliver the most immediate marketing value—like automation, offerings that deliver both brand and performance benefits, and of course connecting people through products that help billions of users every day.
Finally, do you think we’ll be back to having traditional, in-person NewFronts events next year, and why or why not?
Drucker Mann: I think the word “traditional” answers the question for you. No one wants a “traditional” approach, they want a modern approach. Things will look different next year, but I don’t think that’s a bad thing. We’ll learn from this experience, and I think we’ll find out if these shorter presentations are a better use of everyone’s time. If not, I suspect we’ll meet somewhere in the middle.
Cohen: For the foreseeable future we believe that engaging, high-impact virtual events will replace the large in-person gatherings we have all gotten accustomed to. We believe that working from home will outlast the immediate crisis, and so too could the virtual NewFronts. The question really is, Do traditional, in-person NewFronts serve the industry better than the virtual NewFronts we’re launching this year? We shall see. Ultimately, I believe a hybrid event model will emerge.
Regardless of whether they’re in-person or virtual, the upfronts and NewFronts are important media industry events that are crucial to the way brands find creative outlets to connect with consumers. As we emerge from the current crisis, we see an opportunity to not only restart but reset the industry and set us all on a path to significant innovation. Consumers are leading the way, and we must follow. By streaming the 2020 NewFronts, we believe we can catapult the industry toward a brighter collective future.